Global shares retreated and oil prices faltered on Thursday, as encouraging data from Britain and China was overshadowed by uncertainty over the US Presidential election and economy.
US business investment showed signs of stalling in September, an indication that a possible sharp tightening in the federal budget already is weighing on the economy.
A reading of new orders for capital goods outside of defense and excluding aircraft was unchanged last month, suggesting companies are holding back due to fears the US Congress may fail to avert sharp tax hikes and spending cuts in 2013.
Wall Street reversed early gains that had followed a rise in European equity markets, and the dollar edged higher against the euro. Crude oil prices also initially rose, only to retreat later.
"There is an election coming up that is really very difficult to project right now. So when uncertainty becomes part of the mix, guys usually are more likely to lighten their risk profile a little bit," said Gordon Charlop, a managing director at Rosenblatt Securities in New York.
"Between some of the numbers we saw that people were initially happy with but not overly impressed - they weren't able to reverse the sentiment, and that is the way it feels like it is trading today."
The latest polls have shown President Barack Obama and Republican challenger Mitt Romney in a dead heat, with less than two weeks before the election. With the tightening race creating many different scenarios, there is the possibility that the Electoral College winner will not capture the most votes nationwide.
The Dow Jones industrial average was down 23.02 points, or 0.18 percent, at 13,054.32. The Standard & Poor's 500 Index was down 1.98 points, or 0.14 percent, at 1,406.77. The Nasdaq Composite Index was down 1.52 points, or 0.05 percent, at 2,980.17.
European shares, which dropped 3 percent earlier in the week, felt the benefit of the more positive market tone, with the FTSEurofirst300 index of leading regional shares rising 0.2 percent to close at a preliminary 1,095.85 points.
Britain emerged from recession in the third quarter, as its recent hosting of the Olympics helped the economy grow by 1.0 percent, the strongest quarterly growth in gross domestic product in five years, official data showed.
Comments from a Chinese ministry that the country's factory output should pick up toward the end of the year and a survey showing Chinese orders at their highest levels in months also underpinned investor sentiment.
Oil prices traded near break-even and higher, but analysts said the overall outlook for oil was bearish.
Brent crude was up 41 cents at USD 108.26 a barrel, snapping its longest losing streak since July 2010. US oil rose 6 cents to USD 86.79, after settling down for the fifth straight session.
Gold rose, after a drop to seven-week lows the previous day. Spot gold prices rose USD 10.97 to USD 1,712.90 an ounce.
In the US Treasuries market, benchmark yields touched a five-week high ahead of the sale of seven-year notes and after the Federal Reserve on Wednesday stuck to its monetary policy, prompting some Treasury investors to book profits.
The price of the benchmark 10-year US Treasury note was down 2/32 to yield 1.7995 percent.
The dollar rallied to a four-month high against the yen as US data and expectations the Bank of Japan will ease monetary policy next week favored the greenback.
The dollar hit a high of 80.33 yen, its highest since June 25. It last traded at 80.05, up 0.3 percent on the day, according to Reuters data.
The euro last traded at 103.74 yen , up 0.2 percent on the day,
Against the dollar, the euro was down 0.1 percent at 1.2956.