NEW YORK - WALL Street shares shook off opening losses and closed mixed on Thursday as investors looked past weak sales reports from the retail sector and other grim data.

Some analysts said the market may have drawn encouragement from president-elect Barack Obama's pledge for a swift and massive stimulus to jolt the US economy out of recession.

The Dow Jones Industrial Average of 30 blue chips dropped 27.24 points (0.31 per cent) to close at 8,742.46, rebounding from early losses of over 100 points.

The Nasdaq managed a gain of 17.95 points (1.12 per cent) to 1,617.01 and the Standard & Poor's 500 index added 3.08 points (0.34 per cent) to 909.73.

Market action came after Wal-Mart, the biggest global retailer, lowered its profit outlook, citing weakness in international sales, and Macy's said it would close stores and lay off employees due to the weak retail environment.

Ms Colleen King at Schaeffer's Investment Research said the market was 'reacting negatively to news that Wal-Mart Stores lowered fourth-quarter guidance'.

Economist Ethan Harris at Barclays Capital said Mr Obama's economic speech on Thursday appeared aimed at sending a signal of aggressive moves to counter the economic slump.

'We interpret (Mr Obama's remarks) as implying passage of a plan in mid-February, with stimulus to the economy starting in March,' Mr Harris said.

He noted that the president-elect 'made clear that the full court press extends to financial markets, with efforts to 'get credit flowing,' 'address the foreclosure crisis' and 'prevent the catastrophic failure of financial institutions'.'

This, said Mr Harris, 'is part of a broader effort by monetary and fiscal authorities to build confidence by clearly announcing an aggressive battle plan'.

Mr Al Goldman at Wachovia Securities said however the market's upward trend appears to be intact but needed some profit taking. He said many traders expected a lift from the stimulus plan of president-elect Barack Obama.

'We remain short-term positive and expect more upside, but will become more short-term cautious if we see signs of an over-celebration in this 'Obama honeymoon period',' Mr Goldman said.

Among key stocks, Wal-Mart tumbled 7.43 per cent to US$51.38 after marking down its forecast, citing weak international sales and higher expenses.

Elsewhere in the retail space, Macy's shed 3.36 percent to 10.93, Costco rose 1.27 per cent to 17.54, Target increased 1.38 per cent to 37.52 and The Gap shed 4.72 per cent to 12.92.

The tech sector led the gainers. Computer storage giant EMC rallied 6.35 per cent to US$11.89 a day after announcing a reorganizing to stay competitive in the economic downturn.

Elsewhere in the sector, Microsoft rose 3.13 per cent to 20.12 and Intel rebounded from heavy losses a day earlier to gain 0.76 per cent at 14.55.

Bonds drifted higher. The yield on the 10-year Treasury bond declined to 2.445 per cent from 2.494 per cent on Wednesday and that on the 30-year bond eased to 3.045 per cent against 3.066 per cent. Bond yields and prices move in opposite directions.

European stocks closed lower, reacting in part to Wall Street's heavy losses a day earlier and more dismal economic data.

In London, the FTSE 100 index of leading shares slipped 0.05 per cent to 4,505.37. The Paris CAC 40 was down 0.65 per cent at 3,324.33 and in Frankfurt the DAX lost 1.17 per cent at 4,879.91. -- AFP