Dow Ends Higher; Nasdaq Slips

The industrials closed well below their highs of the session.
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Updated from 3:21 p.m. EST

Stocks pulled back sharply Thursday afternoon, after climbing for much of the session following surprise moves by two European central banks and a big October sales report from

Wal-Mart

(WMT) - Get Report

, to close well below their highs of the day.

The

Dow gained 33.15 points, or 0.4%, to 9587.52. The

Nasdaq was down 9.75 points, or 0.5%, to 1827.78, and the

S&P 500 was up 2.74 points, or 0.3%, at 1118.54. The Dow had been up more than 100 points earlier in the day.

Both the Bank of England and the European Central Bank announced half-point reductions in their key lending rates Thursday. The BOE dropped its rate to 4% and the ECB lowered its to 3.25%. The cuts were larger than expected and reflected increased economic risk in a low-inflation environment, the banks said.

Overseas markets were uniformly higher on the moves. London's FTSE 100 ended 1.2% higher at 5278, while Germany's Xetra DAX gained 2.7% to 4994. In Asia, Japan's Nikkei gained 1.4% to 10,432 while Hong Kong's Hang Seng added 2.6% to 10,539.

In economic news, the Labor Department said initial claims for jobless benefits fell unexpectedly by 46,000 to 450,000 in the week ended Saturday.

Retailers reported their October numbers, with Wal-Mart posting a higher-than-expected 6.7% gain in same-store sales. Afterward, the stock rose 63 cents, or 1.2%, to close at $54.45.

Limited

(LTD)

said same-store sales fell 6%, while

Gap's

(GPS) - Get Report

sales fell 17%. Limited climbed 33 cents, or 2.6%, to $12.92. Gap lost 16 cents to $13.67.

The

Enron

(ENE)

saga continued as rival energy trader

Dynegy

(DYN)

confirmed it held talks to buy the company for up to $8 billion in stock. The possible deal is said to have the blessing of

ChevronTexaco

(CVX) - Get Report

, which owns 27% of Dynegy. Enron shed 50 cents, or 5.5%, to $8.55. Dynegy rose 10.4% to $36.43.

The price of crude oil rose after Saudi Arabia's oil minister warned of impending OPEC production cuts. Prices were up almost 4%, the biggest jump since just after the terrorist attacks.

Around 4 p.m. EST, 10-year Treasury note was losing 27/32 to 105 22/32, yielding 4.28%.