Blue chip stocks ended higher following surprisingly strong April retail sales and an unexpected interest-rate cut by the European Central Bank, but technology stocks gave up early gains built on bullish brokerage remarks on semiconductor equipment makers.
The Dow Jones industrial average rose 44.46 points, or 0.40 percent, to end at 10,910.44, according to the latest data, while the Nasdaq composite index fell 27.81 points, or 1.29 percent, to 2,128.82. The benchmark Standard & Poor's 500 index slipped one-third of a point to 1,255.19.
Initially, the Nasdaq was strong, threatening to rally through the 2,200 mark with a 1.9 percent gain, while the Dow peaked with a 1 percent gain. Year-to-date, the Dow is up 1.1 percent, Nasdaq down 13.8 percent and the S&P 500 off 4.9 percent.
Charles Payne, chief market strategist at Wall Street Strategies, an independent research firm, said the market's partial pullback "is a sign of a bit of a caution. We are missing a major catalyst to move to the upside, but the flip side is no one really wants to sell either. We have seen the reemergence of the buy-on-the-dips crowd. They are being more selective, but using weakness to get into the market."
Retailers rallied after many of the stores reported surprisingly strong April sales. In early trading, the Standard & Poor's retail index climbed more than 3 percent to a high unseen in more than three months, then ended with a 2.8 percent gain.
Wal-Mart Inc. rose $1.83, or 3.55 percent, to $53.42 after reporting a 6.5 percent gain in sales. Gap Inc. surged $3.61, or 12.5 percent, to $32.41 after the apparel chain forecast that its earnings would surpass analysts' estimates and it reported a 19 percent jump in sales last month.
In the technology arena, Morgan Stanley raised the investment rating of six big makers of equipment used in the production of semiconductors to strong buy from outperform, saying their stocks had hit bottom. Among the group, Applied Materials fell 3 cents to $51.01 after an early rally, and KLA-Tencor Corp. rose 59 cents, or 1.2 percent, to $50.12.