Investors burdened by angst about upcoming earnings reports shrugged off a spate of mergers and acquisitions news yesterday, leaving stocks with only modest gains. The Dow Jones industrial...

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NEW YORK — Investors burdened by angst about upcoming earnings reports shrugged off a spate of mergers and acquisitions news yesterday, leaving stocks with only modest gains.

The Dow Jones industrial average rose 17.07 to 10,621.03.

Microsoft, one of the 30 Dow stocks, rose 13 cents to close at $26.80 a share. Boeing, also a Dow stock, gained 67 cents to $50.98.

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Broader stock indicators were moderately higher. The Standard & Poor’s 500 index was up 4.06 at 1,190.25, and the Nasdaq composite index gained 8.43 to 2,097.04.

A flurry of merger activity — a buyout of video-rental chain Hollywood Entertainment, reported merger talks between Wells Fargo and British financial giant Barclays, and Alltel’s acquisition of Bellevue-based Western Wireless — was seen as a sign that the economy would remain strong enough to support such deals.

That helped take the edge off oil prices, which topped $47 per barrel for the first time since Dec. 1 before falling substantially in late trading. A barrel of light crude settled at $45.33, down 10 cents, on the New York Mercantile Exchange.

But while the markets rose in somewhat uncertain trading, analysts said earnings reports were foremost on investors’ minds — especially corporate profit outlooks for 2005, which could include how companies feel about the prospects for inflation.

“We’re doing all right for now, but earnings will really determine where we’re going to go,” said Peter Cardillo, chief strategist and senior vice president at S.W. Bach. “And the key with earnings will be guidance for 2005. How concerned is corporate America about inflation? That’s the big question.”

A Commerce Department report showed that wholesale inventories rose by 1.1 percent in November. Economists expected inventories to rise just 0.7 percent, slightly less than the 1.1 percent climb in October. But the report didn’t affect stock trading; analysts saw the rising inventories as companies hedging against economic uncertainty, particularly rising wholesale prices and possible inflation.

Inflation likely will continue to be a critical concern on Wall Street through earnings season, as companies discuss their forecasts for 2005. If companies are concerned that interest rates will rise quickly in response to a falling dollar and mounting inflationary pressures, then stocks could fall, putting a definitive end to the markets’ postelection rally that sagged last week.

“Right now, you’re just seeing people get back in because the prices fell so much last week,” said Bill Groenveld, head trader for vFinance Investments. “I mean, how low are you going to let prices go before you see a deal and get back in? Now it’s a question of whether the economic numbers and the earnings will keep us there.”

After Hollywood Entertainment agreed to an $850 million buyout by Movie Gallery, Hollywood gained 81 cents to $13.86, and Movie Gallery added 95 cents to $20.02.

According to media reports, a deal between Wells Fargo and Barclays is reportedly worth more than $100 billion. Barclays, considered a prime takeover target, climbed 77 cents to $45.42. Wells Fargo slipped 4 cents to $62.13.