Those developments and a very upbeat reading of business activity in the services sector by the Institute for Supply Management helped keep shares afloat for most of the session, but persistent rate worries ultimately stifled the advance.

"The market rallied a bit on the ISM numbers, but it seems to be a subdued rally," said David Hegarty, head trader at Commerzbank Securities. "The interest rate scenario obviously has been hanging over our heads ... and that will keep pressure on the equity market."

According to preliminary results, the Dow Jones industrial average shed 6.25, or 0.1 percent, to 10,310.95.

The broader gauges were modestly higher. The Nasdaq composite index added 6.78, or 0.4 percent, to 1,957.26. The Standard & Poor’s 500 index closed up 1.98, or 0.2 percent, at 1,121.53.

The market was still absorbing yesterday’s statement from the Federal Reserve, which left interest rates unchanged but suggested the Fed was now inclined to push them higher in the months ahead as the economy continues to improve. Analysts said trading was likely to remain volatile as the market further digests the Fed’s revised position, along with other concerns that have overshadowed generally strong economic data and corporate earnings.

"Investors are focused almost totally on Iraq, concern over interest rates and who might be living in the White House next year, and they’re continuing to ignore the very positive economic fundamentals," said Alfred E. Goldman, chief market strategist with A.G. Edwards & Sons Inc. in St. Louis. "It’s very choppy because folks are not looking beyond the end of their noses."

The next market-moving data will be released Friday, with the Labor Department’s April jobs report. Economists are forecasting an increase of 165,000 non-farm payroll jobs. But last month’s surprise of 308,000 new jobs has many second-guessing those estimates.

Among today’s winners on the Dow, the Coca-Cola Co. was up 82 cents at $51.09 after naming a former top official for one of its bottlers as its new chairman and chief executive. The appointment of E. Neville Isdell to succeed retiring CEO Doug Daft ended months of speculation over who would be the next leader of the world’s largest beverage maker.

Charter One Financial Inc. soared $7.91, or 22 percent, to $43.86, after the Royal Bank of Scotland Group announced plans to purchase it for $10.5 billion through its Citizens Financial Group Inc. subsidiary. The combined entity would be one of the 10 largest banks in the United States.

Dell rose 40 cents to $35.71 on an upgrade from Banc of America Securities, which raised its annual forecast on improved margins and computer and notebook sales forecasts.

Oil services shares declined after Banc of America lowered its rating on the sector, citing volatility and an expected drop in drilling activity. Schlumberger Ltd. lost 79 cents to $58.39, and Halliburton Co. fell 31 cents to $29.74.