NEW YORK (AP) -- Mixed signals on the economy had the stock market wavering between slight gains and losses Friday, as a deadline for avoiding sweeping government spending cuts looms.
The Dow Jones industrial average edged up 18 points to 14,072 with an hour left before the closing bell. It was down as much as 117 points in early trading but recovered after an encouraging manufacturing report.
U.S. manufacturing expanded in February at the fastest pace since June 2011, helped by new orders and rising production. The Institute for Supply Management said its manufacturing index reached 54.2, up from January's reading of 53.1. Any reading above 50 signals growth.
In other trading, the Standard & Poor's 500 index rose two points to 1,516. The Nasdaq composite rose seven points to 3,167.
The stock market has continued climbing in recent weeks even as $85 billion in across-the-board spending cuts are set to kick in Friday. The cuts are part of a 10-year, $1.5 trillion deficit reduction plan that was designed to be so unpalatable to both Democrats and Republicans that they would be forced to drum up a longer-term budget deal.
President Barack Obama summoned the top congressional leadership to the White House for a meeting designed to give all sides a chance to stake out their positions, though there are no expectations of a breakthrough on Friday.
Any agreement between the White House and Congress on the spending cuts could drive the market up next week, regardless of whether investors consider it a good deal or not, said Stephen Carl, head equity trader at The Williams Capital Group in New York. It's the uncertainty that unsettles investors.
"The lack of clarity is the problem," he said. "I think it will be a positive for the market just as long as there's concrete news."
Oil and gas companies fell as the price of crude sank to its lowest level of the year. Halliburton, Peabody Energy and other energy stocks were among the biggest losers in the S&P 500. Benchmark U.S. crude oil was trading below $91 a barrel.
American incomes fell 3.6 percent in January, the worst one-month drop in 20 years, the Commerce Department said Friday. U.S. consumers increased spending modestly in January but cut back on major purchases. The report suggests that the expiration of tax cuts on Jan. 1 may have made Americans more cautious.
The Dow is up 7 percent this year and the S&P 500 index is up 6 percent.
The yield on the 10-year Treasury note, which moves inversely to its price, fell to 1.85 percent. That's down from 1.88 percent late Thursday.
Among other stocks making big moves:
— Gap jumped 88 cents to $33.80. The retailer said late Thursday that its quarterly profits jumped 61 percent, topping analysts' estimates, helped by better sales at its Old Navy stores. Gap also raised its quarterly dividend to 15 cents.
— Best Buy Co. rose 17 cents to $16.58 after the retailer said that its fourth-quarter loss narrowed as better sales in the U.S. helped offset weakness abroad, particularly China and Canada.
— Groupon rose 58 cents to $5.11 following news that CEO Andrew Mason was fired. The online deals company's stock plunged 24 percent Thursday after the company delivered a weak revenue forecast for the current quarter.
AP Business Writer Steve Rothwell contributed to this story.