Many investors chose to look at the economy's strengths — a major banking merger, a strong 2004 outlook from IBM and a modestly improving labor market — instead of focusing on drearier topics. But others decided to lock in profits from the market's recent rally, touching off an early round of selling that never quite faded.

The Dow Jones industrial average closed up 15.48, or 0.2 percent, at 10,553.85. The Dow was down as much as 54 points earlier in the day. Broader stock indicators were narrowly mixed.

IBM led the gainers, trumping Wall Street's earnings expectations and offering a very positive outlook for the year. This mollified investors concerned about Intel Corp.'s more timid first-quarter outlook Wednesday. IBM closed up $3.71 at $94.02, having flirted with its 52-week high earlier in the day, while Intel was down 33 cents to $33.06.

Yesterday's session illustrated the power that future earnings reports will have in setting the mood of the market in coming weeks, according to Michael Sheldon, chief market strategist at Spencer Clarke LLC.

Some investors, however, looked to the proposed $58 billion merger between J.P. Morgan Chase & Co. and Bank One Inc. announced Wednesday. Bank One closed up $5.20 at $50.42, while J.P. Morgan Chase fell 30 cents to $38.92.

The government's latest economic reports were mixed. Consumer prices were up 0.1 percent in December, a slight rise that met analysts expectations. First-time jobless claims fell by 11,000, with the four-week average of new claims at its best level in three years. However, retail sales rose only 0.5 percent in December, falling below expectations.