Wall Street shares ended mixed as traders cited lingering concerns about lackluster fourth-quarter earnings and US interest rates.

Analysts say that corporate earnings have failed to improve on prior periods and voiced rate worries days ahead of next Wednesday's meeting of the Federal Reserve at which central bankers will mull US interest rates.

The Dow Jones Industrial Average closed down 15.54 points (0.12 percent) at 12,487.02.

The technology-heavy Nasdaq managed to end a shade higher, up 1.25 points (0.05 percent) at 2,435.49 while the broad-market Standard and Poor's 500 finished 1.72 points (0.12 percent) weaker at 1,422.18.

"The pattern of fewer positive earnings surprises continued this week," said Frederic Dickson, a chief market strategist at DA Davidson and Co.

"The lack of headline grabbing positive earnings surprises and upward revisions in guidance now appear to be weighing on investors minds," Dickson said.

Rate jitters increased in the wake of a government report on durable goods orders.

The Commerce Department said orders for US durable goods rose 3.1 percent in December as transportation equipment orders remained robust.

The gain was weaker than most economists' forecasts that durable goods orders would rise 3.5 percent in December. Nonetheless, the increase in orders was the strongest since September.

Some traders said the report could revive the Fed's inflation concerns. The central bank is expected to keep its key fed funds rate pegged at 5.25 percent next week, however.

In other economic news, the government reported that sales of new US homes rose by more-than-expected in December, but over 2006 fell by the biggest margin in 16 years.

New home sales rose to an annualized clip of 1.120 million last month, defying most analysts who had expected sales to increase to just 1.050 million homes.

However, the figures also showed that sales of newly built homes slumped 17.3 percent in 2006 to 1.061 million homes compared with the prior year's sales pace.

On the corporate front, heavy-equipment maker Caterpillar was in focus after reporting a 10 percent rise in fourth-quarter net profits to 882 million dollars.

Caterpillar's shares closed up a hefty 1.46 dollars (2.5 percent) at 61.09 dollars, as the equipment maker also reported quarterly earnings per share of 1.34 dollars.

The firm's shares also got a boost as Caterpillar reaffirmed its earnings forecast for the coming year.

Microsoft's shares finished up 15 cents at 30.60 dollars after the software giant reported record second-quarter revenues on Thursday, beating market expectations despite a dip in income caused by the delayed release of its new Vista operating system.

Microsoft's revenues rose to 12.54 billion dollars as net profits moderated to 2.63 billion dollars, or 26 cents per share, in the fiscal quarter ending December 31.

Bond prices declined. The yield on the 10-year Treasury rose to 4.879 percent from 4.867 Thursday and that on the 30-year bond climbed to 4.980 percent from 4.962.

Bond yields and prices move in opposite directions.