Tech's Streak Alive

The Nasdaq Comp runs its three-day gain to more than 3%.
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Updated from 4:08 p.m. EST

Blue chips stalled Thursday as traders dealt with an earnings warning at

Wal-Mart

(WMT) - Get Report

and prepared for the government's monthly employment report. Tech shares managed to extend their winning streak to three days.

The

Dow Jones Industrial Average

closed up 2 points, or 0.02%, to 10,882.15, while the

S&P 500

finished up 0.02 point at 1273.48. The

Nasdaq Composite

added 13.41 points, or 0.59%, to 2276.87, bringing its gain for the week to 3.3%. The Nasdaq and the S&P are near four-year highs.

"The market finished the day still in a tight range and it's hard to get a handle on it," said Dave Briggs, head of equity trading with Federated Investors. "It's going to continue to be a tough market and will need to earn its way higher. Tomorrow's economic data won't juice the market, but I don't think we'll give back all of Tuesday's gains."

About 1.78 billion shares traded on the

New York Stock Exchange

, with advancers beating decliners by a 6-to-5 margin. Trading volume on the Nasdaq was 1.92 billion shares, and winners edged losers 8 to 7.

"We are at the top of a trading range," said Ken Tower, chief market strategist with CyberTrader. "Everyone's willing to be bullish, but is the cash there to provide the energy the bulls need? Or is the December high the high-water mark? Dow 11,000 is one of the hooks the bulls will use to try and attract more money into the market."

The 10-year Treasury was down 3/32 in price to yield 4.36% , now 4 basis points above the two-year note, while the dollar rose against the yen and euro.

Oil prices finished lower after Energy Department data showed an unexpected build in natural gas inventories last week. Crude, whose inventories fell by 1 million barrels, was down 63 cents to $62.79 a barrel, while natural gas futures fell 70 cents to $9.50 a barrel.

Wal-Mart fell after saying fourth-quarter earnings will be near the low end of its previous range of 82 cents to 86 cents a share. The retailer also confirmed that December same-store sales rose 2.2% and predicted January comps would rise 3% to 5%. Shares closed down 63 cents, or 1.4%, to finish at $45.69.

Target

(TGT) - Get Report

fared better. Its December comps rose 4.7%, hitting the upper range of its previous guidance.

Kohl's

(KSS) - Get Report

, meanwhile, said its comps were up 4.6% in December, falling a bit short of Wall Street's estimates. Target dipped 16 cents, or 0.3%, to $54.49.

Among smaller chains,

Chico's FAS

(CHS) - Get Report

shares finished Thursday's session higher despite the retailer lowered earnings guidance;

American Eagle Outfitters

(AEOS)

jumped 5.3% on a nearly 10% rise in December comps; and

Abercrombie & Fitch

(ANF) - Get Report

was higher on a 29% gain in same-store sales.

Away from the retail deluge, trading was being influenced by expectations surrounding Friday's release of the December employment report. Economists are currently expecting the Labor Department update to show the U.S. added 200,000 nonfarm jobs last month while the unemployment rate held steady at 5%, according to

Bloomberg.

"By the end of this week, the attention will shift to the December employment report and then on to earnings starting next week," said Marc Pado, market strategist with Cantor Fitzgerald. "By the end of the month, earnings and forward-looking projections will be what needs to step up to the plate if the market is to continue the rally."

On Thursday, the Institute for Supply Management said its services index rose to a reading of 59.8 in December. Economists expected the index to increase slightly to 59.0 from 58.5 in November.

Before the bell, the Labor Department said initial jobless claims unexpectedly fell by 35,000 to 291,000 for the week ended Dec. 31, the lowest level of claims since September 2000. The less volatile four-week moving average declined by 9,750 to 316,750.

Retail sales data failed to buoy the S&P Retail index, which was lower by 0.3%. The Amex Airlines index finished up 0.4%, and the Amex Oil index lost 0.9%. The Philadelphia Housing index rose 1.1%, and the Philadelphia Semiconductor Sector index was higher by 2.4%.

Takeover talk was swirling, with

The Wall Street Journal

reporting that

Computer Sciences

(CSC)

is being eyed by

Hewlett-Packard

(HPQ) - Get Report

and private equity giant Blackstone.

The target company had previously sought a price of $65 a share from

Lockheed Martin

(LMT) - Get Report

in a deal that ultimately fell apart. Computer Sciences jumped $3.99, or 7.9%, to $54.81.

The newspaper also reported that Blackstone, Texas Pacific, Bain and Silver Lake are finalizing an $8 billion buyout of

Affiliated Computer Services

(ACS)

. An announcement could come Monday. The stock tacked on 34 cents, or 0.6%, to $61.47.

Satellite radio provider

XM

(XMSR)

updated subscriber totals and estimates late Wednesday. Washington-based XM said it currently has 6 million subscribers to its pay-radio service, reflecting 2.7 million net additions in 2005. It expects to end 2006 with more than 9 million subscribers. XM dropped 55 cents, or 2%, to $27.29.

Main competitor

Sirius

(SIRI) - Get Report

said it ended 2005 with 3.32 million subscribers, reflecting additions of 2.17 million in 2005. Sirius added 3 cents, or 0.5%, to $6.39.

Among ratings moves, Goldman Sachs downgraded

Merck

(MRK) - Get Report

to underperform from in-line, primarily because of the drugmaker's valuation. Still, the Dow component ended the session higher by 3 cents, or 0.1%, to $33.16.

Another Dow component,

Boeing

(BA) - Get Report

was lower after Bank of America downgraded the jetmaker to neutral from buy, citing valuation. The firm also dropped its price target by $1 to $72. Boeing slid 87 cents, or 1.2%, to close at $70.30.

Overseas markets were mixed, with London's FTSE 100 up 0.1% at 5717 and Germany's Xetra DAX losing 0.2% to 5514. In Asia, Japan's Nikkei rose 0.4% overnight to 16,425, while Hong Kong's Hang Seng gained 0.5% to 15,271.