Stocks pulled back from a morning rally as declines in bank and chipmaker shares offset gains by some retailers and improvement in new claims for unemployment benefits.
GE was the early leader on the Dow ahead of results from the conglomerate, due out next week.
Rounding out the Dow's top three were American Express and Alcoa .
The Labor Department said the number of people filing for state unemployment benefits fell by 21,000 to 454,000 last week, 6,000 fewer than expected.
Energy stocks were among the morning's best performers as oil topped $75 a barrel. Industrials and financials also continued to gain.
Financials, which were Wednesday's top sector, were back in the spotlight after Sun Bancorp said billionaire investor Wilbur Ross is taking a 25 percent stakein the New Jersey bank.
State Street gave an upbeat outlook, which boosted investor sentiment.
U.S. retailers reported chain-store sales this morning, with several beating expectations, helped by the warm weather and timing of the Memorial Day holiday.
JC Penney , Nordstrom, Limited and Abercrombie were among those that beat expectations, while Costco and Gap was among those that fell short.
Overall, sales are expected to have risen 3.2 percent in June.
At 3 pm, the government is out with May consumer credit figures, which are expected to show a drop of $3 billion from the prior month.
The Energy Department will release the delayed weekly report on crude oil inventories at 11 am, pushed back a day by the Independence Day holiday.
Boeing shares rose following news of two acquisitions — privately held Narus, a software company that helps protect large Internet protocol networks from being attacked by hackers, and Argon, an engineering firm that makes surveillance and combat equipment.
Merck rose following news that the company will close eight research and eight manufacturing sites following its merger with Schering-Plough.
Walt Disney shares rose following news that construction magnate Ron Tutor and investment firm Colony Capital are close to a deal to buy Disney's Miramax movie unit for up to $700 million in cash. Separately, Disney lost a $270 million judgment in a suit involving the British company that created the popular TV show "Who Wants To Be A Millionaire."
European shares were higher after both the Bank of England and the European Central Bank both kept their key lending rates unchanged, as expected.
Also in Europe, the bank stress tests remain in focus with details of the methodology limited. Asian shares ended mostly higher on the back of Wall Street’s rally.
In other news, the International Monetary Fund raised its global growth forecast for 2010 thanks to expansion in Asia and higher U.S. private demand, but warned that the European debt crisis poses a significant recovery risk. The IMF now says 2010 growth will be 4.6 percent from its prior 4.2 percent forecast, but it left its 2011 view unchanged at 4.3 percent.
Meanwhile, the Wall Street Journal reported that BP is aiming to fix the leaking Gulf oil well by July 27, ahead of its publicly stated mid-August target.
Still to Come Week:
THURSDAY: Consumer credit
FRIDAY: Wholesale trade