As Mulligan is holding Stephen's arm and saying, "I'm the only one that knows what you are. Why don't you trust me more?" Stephen is thinking, "Cranly's arm. His arm." He compares Mulligan's close approach to a very similar moment of physical closeness in A Portrait of the Artist as a Young Man that ended unhappily.
In the final section of the earlier novel, Stephen and his close friend Cranly engage in an odd dance of self-positioning. Part of the confrontation is intellectual: Cranly has listened to many of Stephen’s beliefs and theories, and now he roughly interrogates him, challenging his renunciation of the Catholic faith urged on him by his mother. Also at stake, however, is the nature and future of the friendship. Stephen is struck by the way Cranly talks about women:
Yes. His face was handsome: and his body was strong and hard. He had spoken of a mother’s love. He felt then the sufferings of women, the weaknesses of their bodies and souls: and would shield them with a strong and resolute arm and bow his mind to them.
Away then: it is time to go. A voice spoke softly to Stephen’s lonely heart, bidding him go and telling him that his friendship was coming to an end. Yes; he would go. He could not strive against another. He knew his part.
A little later, “Cranly seized his arm and steered him round so as to head back towards Leeson Park,” pressing the arm “with an elder’s affection.” Stephen is “thrilled by his touch,” but affirms his determination to pursue his solitary vision, even if it means being utterly alone. This strikes “some deep chord” in Cranly, who wonders whether Stephen would choose “not to have any one person . . . who would be more than a friend, more even than the noblest and truest friend a man ever had.” Stephen asks him, “Of whom are you speaking?” and Cranly does not answer.
Whether or not one reads homoerotic interest into the two men’s probing of each others’ intents (there is nothing overtly homosexual in either’s words or thoughts), it is clear that Stephen wants something more than simple companionship, and that Cranly is possibly interested in supplying it. Joyce placed extravagant burdens of loyalty on his close friends in his university days, and these friendships did not last long or end well. Shortly after breaking with John Francis Byrne, the model for Cranly, Joyce met Oliver Gogarty, the model for Mulligan. Stephen does not respond to Mulligan's touch with the “thrill” that greeted Cranly’s. On the contrary, he seems to scorn Mulligan’s embrace.