Pfizer's profit warning dragged the Dow into negative territory for most of the day and added to traders' concerns about weak overall corporate earnings in 2006 amid a slowing economy. A fourth straight record trade deficit of $725.8 billion last year also left Wall Street wondering whether rising energy and import prices could spark domestic inflation.

But the market managed to recoup its losses and pressed higher late in the day, giving the Dow a sturdy advance this week. Analysts have been expecting volatility among stocks following January's rally and with no major events on the horizon to clarify investors' uncertainty about the economy.

Steven Goldman, chief market strategist for Weeden & Co., said traders were assessing the latest round of earnings reports and whether stocks are fairly priced — or even overpriced. He added that the widening gap between short- and long-term bond yields also stoked worries about a downturn.

"To me, valuation on the average stock has reached fully valued territories," Goldman said. "If you look at price-to-earnings-ratios, they're within 7 percent of the all-time high."

According to preliminary calculations, the Dow rose 35.70, or 0.33 percent, to 10,919.05, after losing as much as 63 points early in the session.

Broader stock indicators also reversed course to close higher. The Standard & Poor's 500 index gained 3.21, or 0.25 percent, to 1,266.99, and the Nasdaq composite index advanced 6.01, or 0.27 percent, to 2,261.88.

Bonds pulled back from an early runup, with the yield on the 10-year Treasury note jumping to 4.58 percent from 4.55 percent late yesterday. The 2-year Treasury yield was up at 4.68 percent, but the inversion of the yield curve signaled a lack of short-term confidence and foreshadowed a possible economic slide.

Meanwhile, the dollar was down against most major currencies, as gold prices plunged.

Crude futures slipped following a report suggesting that high prices were starting to stifle demand. The drop came even as concerns about political unrest in oil-producing countries persisted, with a barrel of light crude losing 78 cents to settle at $61.84 on the New York Mercantile Exchange.

This week, the Dow jumped 1.16 percent; last week, the index skidded 113 points after gaining 240 points the week before. The S&P 500 added 0.23 percent and the Nasdaq declined 0.23 percent for the week.

And more up-and-down trading is likely in the coming weeks without much news to energize investors, analysts say.

"We had the end of the earnings season and lots of news just recently behind us that maybe requires a little absorption period," said Susan Malley, chief investment officer for Malley Associates. "I think a soft market for a couple of weeks is okay."

Investors were unhappy with a lowered sales outlook for Pfizer's top-selling Lipitor cholesterol drug. The company's 2006 earnings forecast of $2 per share was 3 cents short of analysts' estimates. Pfizer dropped 66 cents to $25.68.

Rival drugmaker and fellow Dow component Merck & Co. fell 3 cents to $34.31 following news that editors at the New England Journal of Medicine demanded changes to the published study that led the company to pull its painkiller Vioxx, and which Merck is using today as a pillar to its defense in liability suits.

Fortune Brands Inc., maker of Jim Beam bourbon and Titleist golf balls, expanded its product portfolio with its acquisition of privately held window maker SBR Inc. for $630 million in stock and debt. Fortune Brands slid 49 cents to $78.09.

Auto parts maker Visteon Corp. posted a fourth-quarter profit boosted by the sale of 23 manufacturing plants to former parent Ford Motor Co. and raised its 2006 profits estimates. Its shares nonetheless fell 11 cents to $4.73.

Oracle Corp. confirmed late yesterday it would cut up to 2,000 jobs as part of its effort to absorb its recent acquisition of Siebel Systems Inc and issued earnings guidance in-line with Wall Street forecasts. Oracle finished flat at $12.69.

Advancing issues were even with decliners on the New York Stock Exchange, where volume of 1.7 billion shares lagged the 1.78 billion shares that changed hands yesterday.

The Russell 2000 index of smaller companies lost 1.03, or 0.14 percent, to 717.13.

Overseas, Japan's Nikkei stock average tumbled 1.11 percent. Britain's FTSE 100 slid 0.77 percent, Germany's DAX index lost 0.73 percent and France's CAC-40 was lower by 0.91 percent.