U.S. STOCKS INCH HIGHER NOVEMBER

By Saumya Vaishampayan And Julie Wernau

Health-care shares helped U.S. stock indexes edge higher on Wednesday, the last full trading day of the week.

The Dow Jones Industrial Average rose 21 points, or 0.1%, to 17832. The S&P 500 rose 0.1% and the Nasdaq Composite gained 0.4%.

The U.S. stock market is closed Thursday for Thanksgiving Day and will close early on Friday.

Shares of Pfizer Inc. climbed 3.4% to $33.06, adding 7 points to the Dow as investors continued to digest the announcement that Pfizer and Allergan PLC had hatched a deal to combine in a $155 billion merger. Investors largely shrugged off news that Pfizer drug Lyrica had failed to reduce pain for sufferers of chronic nerve pain.

Consumer-discretionary stocks showed modest gains, up 0.3% as higher employment rates continued to translate into lackluster consumer spending.

"The data is relatively mixed," said Krishna Memani, chief investment officers at OppenheimerFunds. "I think people are happy that they have a job, but they are not happy enough or secure enough to go out and spend a lot."

Initial jobless claims fell by 12,000 to 260,000 in the week ended Nov. 21, the Labor Department said, a healthy signal for the labor market. Economists surveyed by The Wall Street Journal had expected 270,000 new claims. The report was released a day earlier than normal due to the Thanksgiving holiday.

Separately, consumer spending rose just slightly in October while Americans stepped up their savings. Spending inched up 0.1% in October from a month earlier, the Commerce Department said. Economists had expected a 0.3% increase in spending last month.

Dan Farley, regional investment strategist at U.S. Bank, which is overweight consumer discretionary stocks in relation to its benchmarks, said consumers may be spending less on retail but are spending more on "experiences," such as travel and home improvement.

"When you look forward to holiday sales, the data is murky," he said. "There's a lot of fire power there should the consumer want to turn around and spend."

The Stoxx Europe 600 gained 1.4%, retracing losses on Tuesday that followed reports that the Turkish military shot down a Russian jet fighter along the Syrian border.

Investors are looking past geopolitical tensions to focus on the prospect of further monetary stimulus--also known as quantitative easing, or QE--at the European Central Bank's meeting next week. Loose monetary policy has boosted stocks around the world in recent years.

"There is a strong likelihood the ECB is going to expand the QE package" and cut interest rates further, said Mike Bell, global market strategist at J.P. Morgan Asset Management, adding this should boost European stocks heading into year-end.

At the same time, investors continued to parse economic data and speeches from policy makers for clues on whether the Federal Reserve will raise interest rates in December for the first time in nearly a decade. Fed officials focus on employment and inflation data as they decide when to raise rates.

Inflation as measured by the price index for personal consumption expenditures, the Fed's preferred gauge, remained below the central bank's 2% annual target for the 42nd month in a row.

Still, many investors say the U.S. economy has recovered enough for the central bank to begin lifting short-term rates.

"We continue to believe there's enough growth out there that we don't need emergency-level monetary policy," said Hank Smith, chief investment officer at Haverford Trust, which manages $6.5 billion in assets.

Mr. Smith emphasized, however, that the central bank is likely to raise rates slowly, leaving monetary policy easy "for the foreseeable future." That's good for stocks, he added.

Mr. Smith said he bought shares of Exxon Mobil and Chevron in September after a pullback in the energy sector. "Oil is not going to stay low forever," he added.

In commodity markets, U.S. crude-oil futures fell 0.8% to $42.52 a barrel. Gold prices fell 0.4% to $1,069.20 an ounce.

The yield on the 10-year Treasury note slipped to 2.237% from 2.243% on Tuesday. Yields fall as prices rise.

The euro fell against the dollar Wednesday on renewed expectations that quantitative easing could be more expansive. The euro was last at $1.0631, down 0.2% on the day. Easy-money policies tend to reduce the attractiveness of a currency to investors and boost government bonds prices.

Asian markets slipped slightly. The Nikkei Stock Average fell 0.4%, while Australia's S&P/ASX 200 fell 0.6%. Hong Kong's Hang Seng Index was 0.4% lower, but the Shanghai Composite Index rose 0.9%.

Write to Saumya Vaishampayan at saumya.vaishampayan@wsj.com and Julie Wernau at Julie.Wernau@wsj.com