Stocks inch higher as oil prices decline

NEW YORK » Wall Street inched higher yesterday as a broad retreat in commodities prompted investors to shift money out of oil and raw materials-based companies and into other stock sectors.

Falling prices for petroleum and metals led to declines in shares of commodities producers; Exxon Mobil Corp. and Alcoa Inc., both Dow Jones industrials, were among the session's biggest decliners.

The six-day slide in crude prices, which closed under $66 per barrel yesterday, was welcomed by Wall Street as a sign inflation will be kept under control. Cheaper oil also could help boost consumer spending, as well as corporate profits.

"The drop in oil prices is becoming a catalyst, as is other commodities, and giving people confidence to put money into areas that have somewhat been lagging such as technology," said Scott Fullman, director of investment strategy for Hapoalim Securities.

Investors have been looking for any direction about the state of the economy, but have also traded with relatively little conviction ahead of the Federal Reserve's next meeting Sept. 20. St. Louis Fed President William Poole said in a speech Monday that inflation is "pretty well controlled," but offered little else about the economy.

The Dow Jones industrial average rose 4.73, or 0.04 percent, to 11,396.84, after moving in and out of positive territory during erratic afternoon trading. The Dow slipped 0.63 percent last week.

Broader stock indicators also closed higher. The Standard & Poor's 500 index added 0.62, or 0.05 percent, to 1,299.54, and the Nasdaq composite index rose 7.46, or 0.34 percent, to 2,173.25.

Oil fell again yesterday as OPEC said it would continue pumping crude at high rates to extend global supplies. The price of light sweet crude fell 64 cents to $65.61 per barrel on the New York Mercantile Exchange, marking the sixth-straight day of declines.

Exxon Mobil fell $1.87, or 2.8 percent, to $64.94, while Alcoa declined $1.52, or 5.3 percent, to $27.16.

"We'd love to see the energy sector take a time out because we think if oil prices are up, that is a market negative," said Jim Russell, director of core equity strategy for Fifth-Third Asset Management in Cincinnati. "We don't mind at all oil stocks are trading down, all things being equal, that has been one of the inflationary signs everyone's been watching."

Tech stocks were among the beneficiaries of the migration away from oil and metals. Freescale Semiconductor Inc. led the advancers after confirming it's in talks about a possible deal. The stock jumped $6.31, or 21 percent, to $37.06.