Updated from 4:06 p.m. EDT

Stocks closed mostly flat Tuesday as indecision ruled the markets before what eventually would prove a somewhat disappointing, postclose earnings release from Intel ( INTC).

The Dow Jones Industrial Average gained 9.37 points, or 0.09%, to 10,247.59; the S&P 500 tacked on 0.79 points, or 0.07%, to 1115.14; while the Nasdaq Composite was down 5.26 points, or 0.27%, to 1931.66. The 10-year Treasury bond was trading down 7/32 in price to yield 4.47%, while the dollar was higher against the yen and the euro. Crude oil prices fell 10 cents to $39.54, having been down more than 1% earlier in the day.

Volume stayed light, approaching 1.2 billion shares on the New York Stock Exchange where advancers held a slight majority over decliners. On the Nasdaq, nearly 1.5 billion shares changed hands, and decliners had a small edge.

"For the last two weeks, we've basically had a churning market with a downside bias," said Al Goldman, chief market strategist with A.G. Edwards.

Tech stocks edged lower despite an early upgrade of IBM ( IBM), but the prospect of Intel's after-the-bell earnings kept many investors on the sidelines after the drubbing in semiconductor stocks Monday.

Intel finally revealed a 96% jump in second-quarter profits of $1.8 billion, or 27 cents per share, meeting analysts' expectations. However, gross margins came in below the company's previous guidance, and investors balked at the release in after-hours trading, sending the shares down 84 cents, or 3.2%, to $25.30.

"The bigger picture is that this is a market where the big problem is mood," said Chief Market Strategist Al Goldman with A.G. Edwards. "People are just in a 'glass-is-half-empty' mood. Everything is being looked at pessimistically, including all the good fundamentals. As long as this persists, and people continue to focus on Iraq, potential terrorist attacks at the conventions or at the Olympics, and concern about the election, the market is going to continue to just wear people out."

Frank Husic, founder and chief investment officer with Husic Capital Management, said the skepticism pervading the market smells to him like opportunity. Looking back at the bull market of 2003, he observed that "at a time when no one believed stocks could go up, that was a phenomenal opportunity to make money, and then, about the time everyone got convinced it was terrific and easy to pick stocks, we went into this trading pattern, which is intended to really wring out weak hands.

"I think we're on the verge of the second leg of the bull market here, sometime in the next 30 days," he added.

IBM closed up 55 cents, or 0.6%, to $85.50 after Morgan Stanley said earlier that the shares are a buying opportunity at current levels. The stock was above $91 in mid-June and has fallen along with the rest of the Nasdaq, but Morgan Stanley sees it bouncing back even if the rest of the sector doesn't. The brokerage has a $100 price target on IBM.

The tech sector's main weakness could be found in software, with the Goldman Sachs Technology Industry Software Index down 1.7%. Elsewhere, the Philadelphia Semiconductor Index dropped 0.2%, and the Amex Network Index closed down 0.8%.

In other corporate news, Bank of America ( BAC) agreed to buy National Processing ( NAP) for $1.4 billion in cash, creating a bank-card payment processor with nearly $250 billion in annual volume. That comes to $26.60 a share, a 9.5% discount to National Processing's closing price on Monday of $29.40.

Bank of America's stock closed up 36 cents, or 0.4%, to $85.21, while National Processing added $3.15 or 10.7%, to $26.25.

On the economic front, the government reported that the U.S. trade deficit was lower than expected in May, down to $46 billion from the revised $48.1 billion logged for April. Economists expected the figure to be higher, at $48.3 billion.

In earnings news, Johnson & Johnson ( JNJ) said its second-quarter profits more than doubled on strong sales of its drugs for epilepsy and arthritis. Its stock closed up 49 cents, or 0.9%, to $55.38.

Scandal-tarnished Commerce Bancorp ( CBH) said second-quarter earnings jumped 46% from a year ago to $66.7 million, or 79 cents a share, beating estimates by a penny. The New Jersey bank, which saw two executives of its Pennsylvania subsidiary indicted in a Philadelphia corruption probe last month, guided the rest of the year roughly in line with expectations. Its stock lost 92 cents, or 1.7%, to $54.26.

Merrill Lynch ( MER) reported surprisingly flat second-quarter earnings, hurt by hits in bond and derivatives trading volume. It stock shed $1.67 cents, or 3.2%, to $49.80.

Gannett ( GCI) said second-quarter earnings jumped 8.3%, meeting Wall Street's expectations. It earned $1.30 a share for the quarter, up from $1.20 a share for the same quarter last year. The stock added 99 cents, or 1.2%, to $82.38.

Overseas markets closed mixed, with London's FTSE down a fraction to 4358 and Germany's Xetra DAX up 0.3% to 3904. In Asia, Japan's Nikkei rose 0.2% to 11,609, while Hong Kong's Hang Seng fell 0.9% to 12,078.

Before Wednesday's bell, earnings reports are due out from Bank of America, Genzyme ( GENZ), The New York Times ( NYT) and Harley-Davidson ( HDI).

After the close, results are due from Advanced Micro ( AMD), expected to report profits before special items of 9 cents a share, up from last year's loss of 40 cents a share; and Apple Computer ( AAPL), expected to report 15 cents a share, up from last year's 5 cents.

In economic data, Wednesday's tone will be set at 8:30 a.m. EDT when the government is scheduled to release the June results of the import and export price indices. In May, import prices, excluding oil, rose 0.4%, while exports, excluding agriculture, were up 0.2%.

Also, the Census Bureau will release retail sales results for June, expected to decline by 0.7% after jumping 1.2% in May. Excluding auto sales, retail business is expected to be up 0.2% for the month.