U.S. stocks rose modestly in early trade on Thursday, as better than expected pending home sales and monthly retail sales buoyed sentiment.

The S&P 500 Index was up 4.85 points, or 0.45 percent, to trade at 1,085.59 at 10:50 a.m. EDT. The Dow Jones Industrial Average has risen 17.56 points, or 0.17 percent, to trade at 10,287.03. The Nasdaq Composite has gained 0.54 percent.

The National Association of Realtors' pending home sales index, a forward-looking indicator that looks at contracts signed for existing homes, climbed 5.2 percent to 79.4 in July from downwardly revised 75.5 in June. But the July sales were down 19.1 percent compared to same month last year, when it was 98.1.

Most of the U.S. retailers reported better than expected same-store sales results in August, helped by increased promotions, tax-free holidays and a pickup in back-to-school sales. JC Penney Inc. rose 3.1 percent and Costco Wholesale Corp. advanced 1.07 percent after reporting better than expected August sales.

The weekly jobless claims data comes a day ahead of the government's monthly nonfarm payrolls report, which is the most closely-watched economic data pertaining to the jobs market and is a key gauge for the direction and pace of the economic recovery. Weekly jobless claims decreased by 6,000 to 472,000 for the week ended August 28. The 4-week moving average of initial claims declined 2,500 to 485,500 from the previous week's revised average of 488,000.

Non-farm productivity decreased at a 1.8 percent annual rate against analysts’ estimation of 1.6 percent. Output increased at a 1.6 percent annualized rate and hours worked rose 3.5 percent in the second quarter. US factory orders rose 0.1 percent in July, after two straight months of decline, compared to 1.2 percent decline in June, while analysts expected 0.3 percent growth.

The euro advanced 0.04 percent to 1.2814 against the dollar and the yen advanced 0.19 percent against the greenback.

Crude oil futures fell 0.69 percent and copper futures rose 0.39 percent. In precious metal sector, gold futures advanced 0.21 percent and silver futures rose 1.17 percent.

European stock markets pared earlier losses and are currently trading higher with FTSE 100 up by 3.16 points, DAX30 up by 5.16 points and CAC 40 up by 12.55 points.

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