Dow flirts with new highs

NEW YORK (CNNMoney.com) -- Blue chip stocks clung to gains Thursday morning, but the tech sector turned lower, giving up early gains sparked by news of a management change up at Dell.

A mild read on a key inflation indicator was countered by a report showing contraction in the manufacturing sector.

The Dow Jones Industrial average (up 32.28 to 12,653.97, Charts) added a few points around 90 minutes into the session, briefly touching a fresh all-time trading high. The broader S&P 500 (up 4.48 to 1,442.72, Charts) index added a few points and flirted with a fresh more than six-year high.

The tech-heavy Nasdaq composite (up 6.75 to 2,470.68, Charts) lost a few points after rising in the morning.

Dell (up $0.41 to $24.63, Charts) helped pace an early tech advance. The PC maker said late Wednesday that chairman and founder Michael Dell would retake the helm of the company, replacing its CEO, who abruptly resigned and is quitting the board.

The company also warned that fiscal fourth-quarter sales and earnings would miss estimates. However, investors focused on the management changes, and Dell shares rose Thursday morning, helping to lift the broader technology sector.

But the Dell influence waned as the morning wore on, and the Nasdaq struggled.

Stocks rallied Wednesday after the Federal Reserve opted to hold a key short-term interest rate steady at 5.25 percent, as expected, and implied in its statement that the economy is holding firm, while core inflation is moderating.

That outlook seemed to be echoed by economic news released early Thursday morning, including reports that personal income and spending rose in December, in line with estimates. At the same time, the report's inflation component, the core PCE deflator, rose just 0.1 percent. (Full story)

A separate report showed a bigger-than-expected decline in the number of Americans filing new claims for unemployment.

But on the downside, the January ISM index, released later in the morning, showed a bigger-than-expected decline, falling to 49.3. A level below 50 is seen as meaning contraction in the sector.

The report echoed the Chicago PMI, a regional manufacturing report released earlier in the week, suggesting the overall sector may be seeing a slowdown.

Investors also eyed Google's (down $12.97 to $488.53, Charts) earnings, released late Wednesday. The Internet search leader reported higher quarterly and full-year financial results that topped analysts' estimates. However, investors used the strong report as a reason to sell the stock after its recent run. (Full story)

Among other tech movers, On Semiconductor (up $1.04 to $9.40, Charts) rallied 11 percent after reporting higher fourth-quarter earnings that topped estimates.

Exxon Mobil (down $0.02 to $74.08, Charts) reported the highest annual profit in U.S. history Thursday morning, although fourth-quarter net income slipped from a year earlier. (Full story)

Marathon Oil (down $1.03 to $89.31, Charts) reported lower fourth-quarter earnings Thursday, due to weaker refining margins and lower natural gas prices.

Overall energy earnings are expected to decline in the fourth quarter for the first time since 2002, according to Thomson Financial.

Treasury prices inched lower, raising the yield on the benchmark 10-year note to 4.82 percent from 4.80 percent late Wednesday. Treasury prices and yields move in opposite directions.

In currency trading, the dollar rose versus the euro and slumped against the yen.

U.S. light crude oil for March delivery fell 59 cents to $57.55 a barrel on the New York Mercantile Exchange.

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