A surprise warning that cell phone maker Motorola Inc. will post a loss for the first quarter also made the market uneasy as it looked ahead to earnings reports that begin next month.

Investors seemed uncertain about where to take stocks a day after the Federal Reserve issued an economic assessment interpreted as opening up the possibility of a reduction in short-term rates. The statement unleashed a wave of buying that boosted the Dow by 159 points Wednesday, but today's session was erratic, with the Dow weaving in and out of positive territory throughout the day.

Investors remained optimistic about the statement but reined in their buying as they took note of climbing energy costs, which made it look unlikely that inflation will cool enough to provoke a rate cut, and as market experts debated whether the Fed's slight change in language truly suggested a shift in policy.

"At the end of the day, I don't think it means a heck of a lot," said Stephen Massocca, president of Pacific Growth Equities. "The market received it very, very well, but ultimately the Fed is news-dependent."

Still, falling unemployment claims and strength in markets overseas kept stocks from sinking after this week's surge. The Dow has had its best four-day point gain since May 2005; whether it continues the streak will depend much on Friday's report on existing homes sales, inventories and prices for February.

The blue chip index rose 13.62, or 0.11 percent, to 12,461.14.

Broader indicators slipped. The Standard & Poor's 500 index fell 0.50, or 0.03 percent, to 1,434.54. The technology-dominated Nasdaq composite index declined 4.18, or 0.17 percent, to 2,451.74, pulled lower in large part by Motorola's warning.

"Surprisingly, the market's holding on to yesterday's gains," said Peter Cardillo, chief market economist at New York-based brokerage house Avalon Partners Inc. "The market is doing quite nicely — we're not really giving anything up here. It shows that technically, the market has gained momentum."

Market watchers aren't discounting the possibility of further volatility, however, given the potential for Friday's housing data to move the markets and as oil prices continue to rise, reminding investors that inflation is still high and that Americans may need to cut back on discretionary spending.

Oil prices climbed today more than $2 to $61.69 a barrel on the New York Mercantile Exchange. U.S. retail gasoline prices have surged about 20 percent over the past two months as stockpiles decline ahead of the peak driving season.

Giving investors some relief, though, was the Labor Department's report that the number of laid-off workers seeking unemployment benefits fell to 316,000 last week, the third consecutive decline — usually a good sign that consumers are finding work and likely able to keep spending.

Bonds fell sharply after the jobs data, pushing up the yield on the benchmark 10-year Treasury note to 4.59 percent from 4.54 percent late today. The 10-year yield was slightly higher than that of the 2-year, which many market participants took as a positive development. Prior to Wednesday, short-term yields had exceeded long-term yields since August 2006, in a pattern that some say portends a recession.

The dollar rose against other major currencies, while gold prices climbed.

Investors also monitored a Senate committee hearing on subprime mortgage lenders, which make loans to people with poor credit. The hearing didn't reveal much new information about whether the sector's troubles are widespread, a worry that has been a big factor in stocks' recent volatility, but investors are likely to continue watching to see if regulators express the need for federal intervention.

"People are going to want to verify as the days unfold that this subprime thing is contained to a few situations, and that there's no larger contagion that's going to spread," Massocca said.

In addition to subprime woes, oil prices and the benchmark interest rate — which the central bank has kept on hold at 5.25 percent for six straight meetings — investors also focused on a slew of outlooks and earnings reports today. As earnings season nears, experts expect corporate financial results to play a bigger role in market movements.

Technology companies came under pressure after Motorola warned it will swing to a first-quarter loss due to declining sales. The cell phone maker fell $1.24, or 6.6 percent, to $17.50, a level not seen in nearly two years.

Palm Inc. fell $1.71, or 8.8 percent, to $17.74, as investors' speculation diminished that the smart phone and handheld device maker could be bought by Motorola.

Barnes & Noble Inc. reported a rise in fiscal fourth-quarter results, but the figure missed expectations. Rival book, music and movie seller Borders Group Inc. said it swung to a fourth-quarter loss and announced plans to close nearly half its Waldenbooks stores.

Barnes & Noble fell $1.10, or 2.8 percent, to $37.90, and Borders fell 73 cents, or 3.4 percent, to $20.70.

KB Home, one of the nation's largest homebuilders, said its first-quarter profit fell 84 percent, but the results came in ahead of Wall Street's lowered expectations. KB Home fell 54 cents to $47.25.

The Russell 2000 index of smaller companies was up 0.58, or 0.07 percent, at 808.05.

Advancing issues narrowly outnumbered decliners on the New York Stock Exchange, where volume came to 1.62 billion shares, compared to 1.63 billion Wednesday.

Overseas, Japan's Nikkei stock average rose 1.49 percent. Britain's FTSE 100 was up 0.98 percent, Germany's DAX index was up 2.16 percent, and France's CAC-40 was up 1.75 percent.

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