Dow component General Motors' stock gained 10 percent after the automaker record revenues along with reported its sixth straight quarterly loss. Drugmaker Merck & Co., also a Dow component, reported an 11 percent jump in first-quarter profit.

Google Inc.'s first-quarter earnings, reported after the close of regular trading, sent the stock sharply higher in after-hours trading and pointed to greater investor enthusiasm tomorrow.

In economic news, new applications for unemployment benefits dropped by 10,000 to 303,000, according to the Labor Department. The figure was the best showing since the beginning of April, suggesting the labor market is maintaining decent momentum, but reviving the fear of wage inflation.

Oil futures retreated from record highs. A barrel of light crude hit a record high of $72.49 in trading on the New York Mercantile Exchange before falling to $71.95, down 22 cents from yesterday's record closing price.

"The message this week is pretty simple: People are looking for an excuse to buy stocks rather than sell stocks," said Ryan Larson, equity trader at Voyageur Asset Management, a subsidiary of RBC Dain Rauscher. "A year ago, $70 oil would have been the death of us; today, the market is able to digest it and look for positives."

The Dow rose 64.12, or 0.57 percent, to 11,342.89. That was the blue chips' best close since it settled at 11,351.30 on Jan. 20, 2000.

Broader stock indicators were mixed. The Standard & Poor's 500 index rose 1.53, or 0.12 percent, to 1,311.46, and the Nasdaq composite index fell 8.33, or 0.35 percent, to 2,362.55.

The advances masked underlying weakness in the market. Declining issues led advancers by roughly 8 to 7 on the New York Stock Exchange.

Bonds were lower, with the yield on the 10-year Treasury note rising to 5.04 percent from 5.03 percent yesterday. The U.S. dollar was higher against most major currencies. Gold prices were lower, retreating from 25-year highs.

Economic data continued to point to moderating growth. The Conference Board, a private research group, said its Index of Leading Economic Indicators dropped to 138.4 in March from 138.5 the previous month. The declines in the index, a closely watched gauge of future economic activity, followed four consecutive months of rising readings.

The day's earnings were, for the most part, strong. "The market was relieved about the earnings coming out and mildly surprised about GM," said Quincy Krosby, chief investment strategist at The Hartford Financial Services Group Inc., the Connecticut-based insurance company.

General Motors rose $2.07 to $22.64 after it reported a first-quarter loss of $323 million. While this was the company's sixth straight quarterly loss, the company did say its revenues rose 14 percent to a record $52.2 billion, up from $45.8 billion a year ago.

Merck's profits rose despite flat sales, buoyed by higher interest income and revenues from its cholesterol drug joint venture. Merck rose 60 cents to $35.

Chip maker Intel Corp. fell 11 cents to $19.45 after it reported a 38 percent decline in first-quarter profit as PC sales slowed. The company slashed its revenue forecast for 2006, blaming rising inventories of its products held by PC makers and market share losses. But its $1 billion in planned spending cuts cheered investors.

Online auctioneer eBay fell $3.58, or 8.9 percent, to $36.77 after it hit analysts' earnings target for the first quarter and reiterated its outlook for the remainder of the year. Investors had hoped for bigger things from the e-commerce bellwether.

Apple Computer Inc. gained $1.98 to $67.63 after its second-quarter profit rose 41 percent, beating Wall Street estimates.

Google Inc. said its earnings rose 60 percent and its revenue climbed 79 percent, thrilling investors. The stock rose $4.50 to $415 in regular trading before the company's earnings report, then climbed another $19.50, or 4.7 percent, to hit $434.50 in after-hours trading.

Volume on the New York Stock Exchange came to 1.75 billion, down from 1.85 billion at the same time yesterday.

The Russell 2000 index of smaller companies fell 3.75, or 0.48 percent, to 774.67.

Overseas, Japan's Nikkei stock average fell 0.19 percent. Britain's FTSE 100 lost 0.14 percent, Germany's DAX index gained 1.16 percent, and France's CAC-40 rose 0.94 percent.