The Dow and S&P 500 rose on Thursday as energy stocks were driven up by rising oil prices.
However, fears of more credit losses kept gains modest and pushed the Nasdaq into negative territory.
US crude oil jumped in p[rice by more than $US5 a barrel on rising tensions between the United States and Russia and the weaker dollar. Crude oil dipped below $US113 a barrel earlier this month after reaching a record high of $147.27 on 11 July.
The Dow Jones industrial average was up 12.62 points, or 0.11%, at 11,430.05. The Standard & Poor's 500 Index was up 3.17 points, or 0.25%, at 1,277.71. The Nasdaq Composite Index was down 8.70 points, or 0.36%, at 2,380.38.
Home finance agencies Fannie Mae and Freddie Mac came back from earlier losses of about 20% as growing speculation of an imminent government bailout forced investors to buy back shares.
Fannie shares rose 10.2% to $US4.85 while shares of Freddie Mac dipped 2.8US to $US3.16.
JPMorgan Chase lost 2% to $US36.26 while American International Group slid 4.9% to $US19.78 after Citigroup widened an estimate of third-quarter losses timate for Lehman Brothers and lowered its prospects for Goldman Sachs and Morgan Stanley.
Trading volume was light on the New York Stock Exchange, with about 911 million shares changing hands - below last year's estimated daily average of roughly 1.90 billion.
About 1.54 billion shares were traded on the Nasdaq - below last year's daily average of 2.17 billion.
European shares fell on Thursday to their lowest close since 4 August.
Rising commodity prices drove mining and oil companies higher, cancelling losses in the ailing financial sector.
The FTSEurofirst 300 index of top European stocks ended down 0.9% at 1,154.72 points. The index is down 23% to date this year as investors continued to fret about the financial sector.
Major investment banks expect more writedowns at Wall Street firms including investment banks Lehman Brothers and Goldman Sachs.
The Financial Times reported that Lehman Brothers has held talks on a sale of up to half its shares with China's CITIC Securities as well as with state-owned Korea Development Bank - but both investors walked away saying the price was too high.
Oil jumped in price by $US5 a barrel to almost $US121 and gold hit a 10-day high. Oil was less than $US112 a barrel on Tuesday.
Across Europe: Germany's DAX lost 1.3% and France's CAC fell 1.4%.
In Britain, the FTSE 100 closed down 1.6 points at 5,370.2.
NZ & Australia
The New Zealand sharemarket was flat on Thursday.
The NZX 50 index was down 1.8 points to 3330 on turnover of $89m.
Market heavyweights Telecom were down 3 cents to $3.26, Contact Energy unchanged at $8.60 and Fletcher Building up 12c at $7.15.
Auckland International Airport Ltd was up 3c to $2.01 after underlying profit rose 3% to $113m in the year to June.
Mainfreight rose 8c to $7.20 after profit rose 40% to $8.2m in the June quarter while New Zealand Oil & Gas was up 2c to $1.47. The Warehouse was up 4c to $3.49.
In currency markets: at 8.10am on Friday, the New Zealand dollar was trading at US72.07 cents, 81.92 Australian cents, 38.37 pence, 78.13 yen and 0.4836 euro. The Trade Weighted Index was at 66.62.
The Australian share market closed lower. The 200 index was down 54.3 points, or 1.1%, to 4875.2, while the broader All Ordinaries lost 47.9 points, or 0.96% to 4949.6.
On the Sydney Futures Exchange, the September share price index contract was 42 points lower at 4840, on a volume of 20,398 contracts.