Stocks settle after
taking wild ride

NEW YORK » Stocks ended close to unchanged levels yesterday after a rollercoaster session that saw shares climb on bullish testimony from Federal Reserve Chairman Alan Greenspan about the state of the economy, only to be knocked down by anxiety over pricey oil.

Greenspan was upbeat about the economy in remarks to the House Budget Committee, and did not suggest there would be any major changes in the Fed's monetary policy, which was a welcome relief to rate-wary investors. But the short-term cheer over his comments was not enough to allay the market's deeper concerns, particularly as crude futures rallied past $53 per barrel, to a four-month high.

The Dow Jones industrial average shed 18.03, or 0.17 percent, to 10,811.97, closing 58 points off its intraday high of 10,869.83 -- a level the Dow hasn't settled at since June 2001.

The broader gauges also ended the day lower. The Standard & Poor's 500 index shed 0.33, or 0.03 percent, to 1,210.08. The Nasdaq composite index was down 3.75, or 0.18 percent, at 2,067.50.

In his remarks, Greenspan emphasized the importance of congressional action on Social Security, and said hiking taxes would be negative for the economy right now. His assertion that economic activity "appears to be expanding at a reasonably good pace" was greatly reassuring to investors, but the late-day surge in oil prices was too great for the market to ignore.

The U.S. Energy Department's weekly supply report showed a rise in gasoline and crude inventories, and a decline in stores of distillate fuel, which includes heating oil and diesel. But a separate report from the Paris-based International Energy Agency suggested global energy demands were likely to rise during 2005.

Traders bet prices would do the same: Light, sweet crude for April delivery soared $1.37 to settle at $53.05 a barrel on the New York Mercantile Exchange. The dollar edged higher against other world currencies, gold prices were mixed and long-dated Treasurys ended lower after a choppy session; the yield on the benchmark 10-year note rose to 4.38 percent, up from 4.37 percent late Tuesday.

Oil worries, combined with persistent concerns about inflation and interest rates, have made for a difficult market, and analysts think more volatility lies ahead. This has contributed to a "one step forward, two steps back" climate for stocks, said Peter Cardillo, chief strategist with S.W. Bach & Co.

"The tone of the market seems strong (but) we're in a cautious atmosphere," Cardillo said.