US shares edged higher despite weak retail sales figures and President Obama's plans to hit the banks with a new levy to generate at least $90bn in tax for the government.

After hours, computer chip maker Intel also gave the market a boost with fourth quarter figures well ahead of expectations accompanied by an upbeat assessment of prospects.

The Dow closed 29 higher at at 10,710, Nasdaq was 8 points higher at 2,316, while the S&P up just over 2 points at 1,148. Wall Street's top 50 financial firms, those with assets greater than $50bn, will all be hit by the levy, the aim of which is to recoup all of losses on the $700bn cash advanced under the TARP rescue scheme.

Goldman Sachs shares fell but Bank of America and JPMorgan Chase were higher.

Intel, meanwhile, reported a fourth quarter 2009 profit of $2.3bn, or 40c per share, up nearly ten-fold on the same time the previous year. Sales rose 28% to $10.6bn. For the full year, Intel posted a profit of $4.4bn, or 77c per share, on revenue of $35.1bn. First quarter guidance is revenue between $9.3bn and $10.1bn, higher than market forecasts, with demand for laptops and notebooks booming.

US retail sales fell unexpectedly in December as cautious Americans scaled back spending over the Christmas period. Sales fell by 0.3% from November. Analysts had been expecting a rise of around 0.5%. In November, sales were up by 1.8% from the previous month. This was the first decline after four months of gains.

The unwelcome sales data comes as figures showed a bigger than expected rise in unemployment last week. Weekly jobless claims rose by 11,000 in the week ended 9 January to 444,000, according to the Labor Department. The rise was bigger than anticipated by economists.

RealtyTrac, the online marketer of foreclosed homes, reported that one in 45 households, almost 3 million homeowners, fell behind on their mortgage payments during 2009.

Oil shares continue to decline as the oil price remains weak with Chevron heading the fallers for a second day. Pharma company Merck continues to rise after yesterday's upgrade by Credit Suisse.

Meat producer Tyson Foods rose after Credit Suisse said the company is "unloved, and in the early stages of a cyclical rebound in protein processing". Buyers continue to show interest in Chinese search engine company Baidu as Google threatens to exit the Chinese market.

Eastman Kodak said it was suing Apple and Research In Motion for infringement of its digital imaging technology.

S&P 500 - Risers
Textron Inc. (TXT) $22.79 +8.94%
Keycorp (KEY) $6.85 +5.55%
Marriott International Inc. (MAR) $29.69 +5.55%
Tyson Foods Inc. Class A (TSN) $14.04 +5.48%

S&P 500 - Fallers
Sprint Nxtel Corp. (S) $3.69 -7.75%
Quanta Services Inc. (PWR) $19.44 -5.77%
First Solar Inc. (FSLR) $124.84 -5.51%
Cb Richard Ellis Group (CBG) $13.48 -3.37%

Dow Jones I.A - Risers
Intel Corp. (INTC) $21.55 +2.81%
Merck & Co. Inc. (MRK) $39.99 +2.72%
Microsoft Corp. (MSFT) $31.00 +2.14%

Dow Jones I.A - Fallers
Verizon Communications Inc. (VZ) $31.22 -2.04%
AT&T Inc. (T) $26.19 -1.69%
Wal-Mart Stores Inc. (WMT) $54.21 -1.45%
Alcoa Inc. (AA) $15.81 -1.06%

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