The Dow got a lift from Honeywell, which rose by as much as 6.8 percent after it issued 2006 earnings guidance in line with Wall Street's expectations.

Pharmaceutical stocks also rose with Pfizer Inc., which announced a 26 percent dividend increase Monday, leading the way.

"Big stocks are finally capturing some attention," said Philip S. Dow, managing director of equity strategy at RBC Dain Rauscher in Minneapolis.

A recent upward revision in the nation's gross domestic product, along with a positive outlook from General Electric Co. yesterday and Honeywell's guidance today are "all things that say America has not lost its fastball," Dow said.

The Dow rose 59.79, or 0.55 percent, to 10,883.51.

Broader stock indicators were mixed. The Standard & Poor's 500 index rose 5.31, or 0.42 percent, to 1,272.74, hitting a four-year high. The Nasdaq fell 2.41, or 0.11 percent, to 2,262.59.

Bonds rose, with the yield on the 10-year Treasury note falling to 4.45 percent from 4.52 percent late yesterday. The U.S. dollar was lower against other major currencies in European trading. Gold prices also fell.

Crude oil futures, gasoline and natural gas prices all settled lower following a surprisingly strong inventory report from the Department of Energy. A barrel of light crude settled at $60.85, down 52 cents, in trading on the New York Mercantile Exchange.

Just how great an effect energy prices could have was evidenced by the trade deficit, which rose to an all time high in October as oil shipments soared and the United States set deficit records with China, Europe, Canada and Mexico. So far this year, the trade deficit is running at an annual rate of $718 billion, far surpassing last year's $617.6 billion imbalance.

Hopes that the Federal Reserve's streak of interest rate hikes will soon end helped the mood on Wall Street. yesterday's Federal Open Markets Committee meeting "was a watershed in the sense that it was the first time the Fed left the window open for a pause in this 18-month old tightening cycle," said David A. Rosenberg, Merrill Lynch's North American Economist, in a research note today.

While the Fed raised interest rates another quarter percentage point to 4.25 percent, the wording of the central bank's economic assessment statement was interpreted as a signal that the Fed would soon halt its rate increases.

In company news, both Banc of America and Bear Stearns downgraded Apple Computer, with Banc of America saying the 50 percent run-up in the stock's price over the past six weeks has made it hard to justify more buying. Apple, which makes computers and iPods, fell $2.97 to $72.01.

Diversified manufacturer Honeywell International Inc. jumped $1.62 to $37.50 after it gave 2006 earnings guidance of $2.35 to $2.50 a share, up 20 percent to 30 percent. The company also affirmed its earnings and sales targets for 2005.

Stock in Dow component Boeing Co. hit an all-time high after Australia's flagship carrier Qantas said it could order up to 115 new Boeing 787 "Dreamliners" in a deal that may net Boeing at least $14.4 billion. The twin aisle twin engine jets are built for long-distance flights. Boeing rose 86 cents to $71.45.

DaimlerChrysler AG and parts maker Lear Corp. have agreed to try to settle a dispute over pricing. DaimlerChrysler had sued Lear after it threatened to stop shipping parts to the auto maker unless DaimlerChrysler agreed to pay more. Lear said its own suppliers had raised prices. DaimlerChrysler fell 57 cents to $50.73 and Lear fell 8 cents to $28.53.

Advancing issues led decliners by roughly 2 to 1 on the New York Stock Exchange, where volume was 1.64 billion, up from 1.78 billion at the same time yesterday.

The Russell 2000 index of smaller companies rose 1.47, or 0.21 percent, to 690.50.

Overseas, Japan's Nikkei stock average fell 1.99 percent. Britain's FTSE 100 rose 0.25 percent, Germany's DAX index fell 0.44 percent, and France's CAC-40 fell 0.40 percent.