The Dow industrials rose on Wednesday following better-than expected manufacturing data while the Nasdaq headed lower as Intel Corp said uncertainty ruled out a clear revenue forecast.

Procter & Gamble also helped to lift the Dow after the company lifted its dividend. The shares rose 2.6 percent to $48.45, making it the biggest boost to the blue chip index.

Intel shed 4.12 percent to $15.36 despite beating quarterly expectation after the chip maker ruled out clear guidance, while retailers headed lower after the Chief Executive of Wal-Mart Stores Inc said he sees no quick end to the recession.

Boosting sentiment on the economic front was a report that showed manufacturing activity in New York State contracted less severely in April after tumbling to a record low in March, boosting manufacturing stocks.

The most important economic report that came out this morning in my opinion is the Empire manufacturing report, said Michael Sheldon, chief market strategist at RDM Financial in Westport, Connecticut.

The future six month outlook, which is in positive territory, rose significantly, indicating there maybe is some light ahead for the beaten down manufacturing sector.

The Dow Jones industrial average <.DJI> edged up 2.63 points, or 0.03 percent, to 7,922.81. The Standard & Poor's 500 Index <.SPX> dropped 2.65 points, or 0.31 percent, to 838.85. The Nasdaq Composite Index <.IXIC> lost 17.31 points, or 1.06 percent, to 1,608.41.

Manufactures headed higher, with 3M up 1.9 percent to $53.93 while United Tech rose 2 percent to $46.54.

However, the S&P retail index <.RLX> slid 1.2 percent. Besides budget retailers such as Wal-Mart, down 0.6 percent to $50.85, department store outlets such as Macy's Inc , were down 3.4 percent to $11.58, also lost ground.

The head of Wal-Mart Stores Inc said on Wednesday there remained a lot of stress in the economy and he did not anticipate a quick end to the recession.

U.S. stocks enjoyed a five week rally to last Friday which pushed the S&P 500 up 24 percent from a bear market closing low on March 9, mainly on optimism about the economy. The index is down almost 7 percent on the year.

(Editing by Theodore d'Afflisio)

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