US STOCKS-S&P nears all-time high, traders eye weak volume

* Jobless claims average shows resilient labor market

* Factory data and home resales weaker-than expected

* Investors wary of light volume

* Indexes up: Dow 0.05 pct, S&P 0.25 pct, Nasdaq 0.36 pct (Updates to midafternoon)

By Noel Randewich

May 21 (Reuters) - U.S. stocks rose on Thursday afternoon, with the S&P 500 just shy of its record high as disappointing economic data bolstered the view that an interest rate hike would come only later in the year.

Traders warned that below-average volume in recent sessions suggests that not all of Wall Street may be confident in the market's gains.

"It doesn't matter if we're at an all-time high if there are just two guys trading a stock back and forth," said Brian Battle, director of trading at Performance Trust Capital Partners (Other OTC: PGPHF - news) in Chicago. "It's something to be aware of."

As the quarterly earnings reporting season draws to a close, volume on U.S. stock markets has been below the month-to-date average for several sessions, according to BATS Global Markets.

Trading also appeared to be light on Thursday as Wall Street approached the long Memorial Day weekend, Battle and others said.

Data on Thursday showed that jobless claims rose more than expected last week, although the underlying trend continued to point to a rapidly tightening labor market.

Another report showed a surprise decline in home resales in April and persistent weakness in manufacturing in May.

Federal Reserve officials have all but ruled out a rate hike next month. Investors now await Fed Chair Janet Yellen's speech on Friday for new clues about when the central bank will begin raising interest rates for the first time since 2006.

At 2:32 p.m. the Dow Jones industrial average rose 10.01 points, or 0.05 percent, to 18,295.41; the S&P 500 gained 5.28 points, or 0.25 percent, to 2,131.13 and the Nasdaq Composite added 18.36 points, or 0.36 percent, to 5,090.10.

Seven of the 10 major S&P 500 sectors were higher, with the energy index rising 0.9 percent as oil prices rose for a second day.

Salesforce.com, the subject of takeover speculation for the past few weeks, rose 3.55 percent to $72.65 after posting a profit for the first time in seven quarters.

Advancing issues outnumbered declining ones on the NYSE by 1,655 to 1,342, for a 1.23-to-1 ratio on the upside; on the Nasdaq, 1,358 issues fell and 1,339 advanced for a 1.01-to-1 ratio favoring decliners.

The benchmark S&P 500 index was posting 16 new 52-week highs and two new lows; the Nasdaq Composite was recording 70 new highs and 39 new lows. (Additional reporting by Tanya Agrawal; Editing by Savio D'Souza and Jonathan Oatis)