The Dow Jones industrial average spent most of the session hovering near the psychologically key 10,000 mark Thursday and ended a pinch above the start after investors analyzed a slew of earnings for signs of future potential for profit growth.

The Dow Jones industrial average picked up 4.20 points, or 0.04 percent, at 10,050.33 after slipping below 10,000 several times during the trading day for the first time since May 25. The Nasdaq Composite Index closed higher 14.69 points, or 0.78 percent, at 1,889.06, while the Standard & Poor's 500 ended up 2.96, or 0.27 percent, at 1,096.84.

Stocks have been slumping as investors have found little comfort in a mixed bag of quarterly results and outlooks that have been unable to reassure that profit growth will not slow in the second half.

"The fear of earnings not holding up in the second half of the year has put the bears in full control, and the market is basically testing the trading ranges," said Peter Cardillo, chief strategist with S.W. Bach & Co. "Any close under the 10,000 level (on the Dow) will obviously indicate a psychological breakdown, and could induce more selling."

The market found its footing as the Standard & Poor's 500 index hit technical support in the 1,080-1,085 area when it reached the day's low of 1,084.16, said John O'Donoghue, head of listed trading at Credit Suisse First Boston. "That's the really big bottom of the range, so we'd probably be in good shape for a rally after that."

Also on Thursday, an economic report showed a drop in a closely watched gauge of future U.S. economic activity in June, which confirmed momentum has slowed from its heady pace earlier in the year. The Conference Board (search), a private research firm, said its index of leading indicators fell 0.2 percent in June to 116.2, after a downwardly revised 0.4 percent gain in May.

On the upside, the number of Americans signing up for unemployment benefits fell more steeply than expected last week, another report showed early on Thursday. First-time claims for state unemployment insurance aid dropped 11,000 in the week ended July 17 to 339,000, down from a revised 350,000 in the prior week, the Labor Department (search) said.

Caterpillar Inc. (CAT), the world's largest heavy equipment maker, was the biggest drag on the Dow industrials after it said earnings were hurt by higher operating costs that offset increased volume and selling prices. Its shares fell $3.42, or 4 percent, to $73.53.

Internet auctioneer eBay Inc. (EBAY) disappointed investors with a lower-than-expected full-year earnings forecast that was released after the closing bell Wednesday. Results for the June quarter slightly topped analysts' average estimates, but investors reacted to the cautious forecast and eBay's view that sales of merchandise on its Web site were settling into a seasonal pattern typical of mature retailers. It erased its losses, however, and rose 79 cents to $77.39.

Eli Lilly & Co. (LLY) was in line with expectations, excluding charges, but it fell 54 cents to $64.74 because of a drop in net income and a lower its forecast for the quarter and the year.

McDonald's Corp. (MCD) fell 9 cents at $27.57, despite beating estimates on strong results from salads, late-night hours and other recent initiatives that helped it record a fourth-straight quarter of double-digit sales growth

Sears, Roebuck and Co. (S) reported much worse-than-expected quarterly profit because of poor spring clothing sales and slashed its full-year forecast, sending its stock down $1.00 to end at $33.93.

Adolph Coors Co. (RKY) was down $2.33 at $72.40 following the official announcement of its planned merger with Canadian brewer Molson Inc. (search), which values both companies at $3 billion and would create the world's fifth-largest beer company. A former Molson executive could cause a hitch, however; The Wall Street Journal reported that Ian Molson is expected to make a counter offer to acquire the company for as much as $4 billion.

Wireless technology provider Qualcomm Inc. (QCOM) was a bright spot on the Nasdaq, gaining after it said on Wednesday profit more than doubled. Qualcomm also raised its financial forecasts. Qualcomm's shares rose $4.82, or 7 percent, to $72.50.

Data storage equipment maker Network Appliance Inc. (NTAP) rose $1.67, or 10 percent, to $18.88 after it reiterated its earnings and revenue forecasts for its first quarter and full fiscal-year 2005.

Lam Research Corp. (LRCX) surged 20 percent, or $3.95, or $23.72, a day after it said quarterly earnings more than doubled.

Decliners outnumbered advancing issues by more than 3 to 2 on the New York Stock Exchange. Preliminary volume came to 1.67 billion shares, compared with 1.68 billion traded on Wednesday.

The Russell 2000 index, which tracks smaller company stocks, was down 2.05, or 0.4 percent, at 546.52.

Overseas, Japan's Nikkei stock average finished 1.3 percent lower Thursday. In Europe, France's CAC-40 fell 1.8 percent, Britain's FTSE 100 dropped 1.6 percent and Germany's DAX index declined 2 percent.

Reuters and The Associated Press contributed to this report.