NEW YORK (CNN/Money) - Stocks managed to close higher Wednesday, after a tug of war throughout the day split investor action between positive earnings reports and profit taking after a broad market rally in the previous session.

The Nasdaq composite (up 14.80 to 1466.16, Charts) rose 1 percent, hitting a new high for the year and reaching its highest level since Dec. 2. Meanwhile, the Dow Jones industrial average (up 30.67 to 8515.66, Charts) gained 0.4 percent and the S&P 500 index (up 7.65 to 919.02, Charts) scored a 0.8 percent rise.

"We continue to see bias to the buying side, but it's less drastic than yesterday," said Hedi Reynolds, head of Nasdaq trading at Morgan Keegan. "We're in a wait-and-see mode with earnings, and we're seeing a little profit taking today. ... The jury is still out on how the rest of the earnings will be."

Earnings news dominated trading and, for the most part, investors liked the numbers they saw, giving individual shares some hefty lifting. But the urge to cash in some of the previous day's rewards muted the broader market's gains.

On Tuesday, the Dow, the Nasdaq and the S&P 500 index chalked up gains of about 2 percent each. The rally brought the Nasdaq and the S&P 500 to levels not seen since mid-January. The Dow rose its highest level in more than a month.

"After a big up day like you had yesterday, you have to have some digestion," said Brett Gallagher, head of U.S. equities at Julius Baer. "Once things run up by a big amount, then investors have to step back."

With roughly one-third of the Standard & Poor's 500 due to report results by week's end, investors' eyes, once again, are likely to focus on earning reports Thursday.

Among Dow components, analysts expect American Express (AXP: down $0.37 to $37.52, Research, Estimates) to post a profit of 52 cents a share for the quarter, up from 46 cents in the year-earlier period, when it reports Thursday. SBC Communications (SBC: up $1.82 to $21.80, Research, Estimates) is also set to report, with Wall Street forecasting earnings of 34 cents a share, a drop from 51 cents in the prior-year period.

Amazon.com (AMZN: down $0.15 to $25.43, Research, Estimates) also is on the docket to report quarterly results, with analysts, on average, expecting the company to swing into a profit of 4 cents a share from a loss of a penny for the same period last year.

After the close of trading Wednesday, telecom equipment maker Qualcomm posted a higher net profit of 13 cents a share, compared with 5 cents in the same period last year, and reported a jump in revenue.

Meanwhile, chip equipment maker KLA-Tencor (KLAC: down $0.94 to $40.92, Research, Estimates) said it earned 14 cents a share for the quarter, beating analysts' estimates by 2 cents but coming in worse than the 17 cents it earned in the same quarter of 2002.

Also due Thursday, before the opening bell, is the government's report on durable goods orders for March. Economists, on average, expect the number of orders to have fallen 0.6 percent, less than their 1.6 percent decline in February, according to Briefing.com.

At the same time, the government is scheduled to release the number of new unemployment filings for last week. Economists surveyed by Briefing.com, on average, forecast a decline to 425,000 new claims, from 442,000 in the prior week. Any reading above 400,000 signifies weakness in the economy.

On the earnings front, AOL Time Warner (AOL: up $0.69 to $14.00, Research, Estimates), parent company of CNN/Money, saw its shares jump 5.2 percent Wednesday after it reported first-quarter operating income early Wednesday that appeared to be higher than expected and said it expects to meet full-year targets.

The media company said it earned 8 cents a share, excluding one-time gains and special items, down from the 9 cents a share it earned on that basis from continued operations a year earlier, but well above the First Call analysts' consensus forecast of 4 cents.

Online auctioneer eBay (EBAY: up $5.10 to $94.32, Research, Estimates) also saw its stock advance after posting first-quarter earnings that came in better than expected late Tuesday and up from the same period last year. Several analyst firms issued positive notes on the company following the earnings report. The shares gained 5.7 percent.

A few Dow components also gave investors a look at their quarterly numbers.

AT&T (T: up $3.20 to $17.01, Research, Estimates) said its earnings for the first quarter rose to 67 cents a share, up from 60 cents a year earlier. Analysts had expected the company to earn 52 cents a share. The stock soared nearly 23.2 percent.

Boeing (BA: up $0.34 to $28.14, Research, Estimates) also posted better-than-expected results, sending its stock 1.2 percent higher after the company reported first-quarter earnings of 42 cents a share. The profit fell from 75 cents in the same period last year, but was well above analysts' expected 31-cents-a-share, according to analysts surveyed by First Call.

Weighing on the markets, Eastman Kodak (EK: down $1.65 to $30.00, Research, Estimates) posted a net profit of 4 cents a share, down from 12 cents in the same quarter last year. Its shares sank 5.2 percent.

In other corporate news, Wyeth (WYE: up $4.15 to $40.05, Research, Estimates) jumped 11.6 percent, after the drugmaker posted earnings much better than analysts expected, citing the sale of its shares of Amgen (AMGN: up $2.86 to $63.80, Research, Estimates). Excluding the gain from the sale, Wyeth earned 54 cents a share, which was 3 cents better than Wall Street's average forecast, according to First Call.

On the economic front, the Federal Reserve released its "beige book," a region-by-region look at the economy that will serve to guide policy makers when they meet May 6. The report said consumers were wary of spending in March and early April because of the war in Iraq, which left economic activity lackluster. The Fed also said it was too early to make conclusions as to how the war affected sales, spending, and consumer and business confidence.

Market breadth was positive. Volume Wednesday and Tuesday was a bit heavier than it has been in the past week. Advancing stocks outnumbered losers by five to three on the New York Stock Exchange, as 1.6 billion shares traded. On the Nasdaq, winning stocks also beat out losers by a five-to-three margin as 1.8 billion shares changed hands.

U.S. Treasury bonds retreated. The bellwether 10-year note lost 3/32 of a point in price, its yield nudging up to 3.97 percent. The dollar rose against the yen, but was little changed versus the euro.

Oil prices continued to fall. Light crude futures for June delivery lost $1.34 to $26.65 a barrel in New York. Gold for June delivery also slipped, losing $2.90 to trade at $331.90 an ounce in New York.

European stock markets closed out the day higher. Asian and Pacific region stocks ended their trading session mixed.