subdued China concerns; Fed eyed * * * * * [Video]

U.S. equities pared gains on Thursday despite concerns over China having been largely subsided while investors digested a number of economic data points.

"We're still trading in this sort of range," said JJ Kinahan, chief strategist at TD Ameritrade. "Yesterday was such an amazing rally that it's hard to believe we come out of it unscathed."

U.S. stocks held higher during most of afternoon trading after trading in a back-and-forth range throughout the morning despite a massive fall in oil prices.

U.S. crude traded below $42 per barrel for the first time since March 2009, leading the energy sector to trade as low as 1.35 percent. WTI futures settled down 2.5 percent.

"The negative effect of falling oil prices on stocks maybe has faded," said Zachary Karabell, head of global strategy at Envestnet.

Subdued concerns over China devaluing its currency by 10 percent also propped U.S. markets higher, said William Lynch, director of investments at Hinsdale Associates. "I think that's in the rear-view mirror now," he said.

On Wednesday, U.S. equities whipsawed, dropping more than 1 percent at their lows before closing mostly higher. Stocks were largely weighed down by the People's Bank of China's decision to further weaken the yuan against the U.S. dollar.

"The last thing they want is spiraling devaluation, but at the same time they are standing by their word," PBoC vice governor Yi Gang said.

Investors also digested a slew of economic data, as U.S. retail sales for July rose 0.6 percent, slightly above estimates, the Commerce Department said, boosted by auto sales. June's retail sales were also revised up to show them unchanged instead of the previously reported 0.3 percent drop, Reuters said.

"When you take out auto sales, it really wasn't [an increase]," said Maris Ogg, president at Tower Bridge Advisors. "We've had money coming into our pockets due to [lower] gasoline prices and we haven't spent it."

Ogg added the U.S. consumer has become more prudent since the recession and is only buying what he or she truly needs.

Weekly jobless claims came in at 274,000, slightly above a consensus estimate of 270,000, while import prices fell 0.9 percent amid lower oil costs and a strong dollar.

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Traders work on the floor of the New York Stock Exchange.

"Bottom line, the song remains the same as the pace of firing's remain quiescent as employers hold tight to their qualified workers," Peter Boockvar, chief market analyst at The Lindsey Group said in a note about the jobless claims number.

U.S. business inventories rose 0.8 percent in June, well above the estimated 0.3 percent rise.

"I think we're overlooking the negative business inventories data," said Kim Forrest, senior equity analyst at Fort Pitt Capital.

Weekly natural gas inventories also rose by 65 billion cubic feet, the Energy Information Administration said.

This combination of data sets and current market conditions could in fact lead the Federal Reserve to normalize monetary policy, said Mark Luschini, chief investment strategist at Janney Montgomery Scott.

"They seem eager to get on with it ... and that's got the market on edge," Luschini said.

In Europe, stocks closed higher as investors kept an eye on the latest developments in China and the progress being made on Greece's new bailout program.

In corporate news, retailer Kohl's reported quarterly results that missed Wall Street's expectations, citing a delay in tax-free sales by a number of states.

Elon Musk's Tesla Motors filed to offer 2.1 million common shares in an attempt to raise at least $500 million in new capital. The company's stock traded higher before the bell.

Merck, Monster Beverage, GoPro and Yahoo shares were all upgraded by BMO Capital Markets, Morgan Stanley, Cowen & Co. and Bernstein, respectively.

Symbol	Name	Price		Change	%Change
DJIA	Dow Jones Industrial Average	17408.92		6.41	0.04%
S&P 500	S&P 500 Index	2083.93		-2.12	-0.10%
NASDAQ	Nasdaq Composite Index	5035.22		-9.17	-0.18%

The Dow Jones Industrial Average traded 74 point higher, or 0.4 percent, at 17,477, with Cisco Systems leading advancers and Intel andCaterpillar the greatest laggards.

The S&P 500 traded up 6 points, or 0.3 percent at 2,092 with consumer discretionary leading seven sectors higher and energy leading three sectors lower.

The Nasdaq traded up 21 points or 0.4 percent.

The U.S. 10-year yield was last up 6 basis points at about 2.19 percent.

Gold futures settled down 0.9 percent at $1,114.56 an ounce.

Decliners were about two steps ahead of advancers at the new York Stock Exchange, with an exchange volume of 428 million and a composite volume of 2.13 billion at 2:39 p.m.

The CBOE Volatility Index (VIX),widely considered the best gauge of fear in the market, traded near 13.

by  Fred Imbert
subdued China concerns; Fed eyed