Stocks rise modestly as oil hits new high

NEW YORK » Wall Street closed a quiet session with a moderate advance yesterday, with energy and other commodities companies leading the market as oil prices extended their record-breaking run.

The price of crude oil swept past $124 a barrel in late New York Mercantile Exchange trading, while gasoline rose to a new record of its own at the pump, climbing to a national average of nearly $3.65 a gallon.

Although the rising price of oil ignited concerns about inflation on Wednesday, knocking the Dow Jones industrial average down more than 200 points, stocks managed to hold on to their gains even as oil rose yesterday.

Stocks also rose after retailers issued April sales results that, while not strong overall, were less gloomy than expected.

The Dow rose 52.43, or 0.41 percent, to 12,866.78. The Standard & Poor's 500 index rose 5.11, or 0.37 percent, to 1,397.68, and the Nasdaq composite index rose 12.75, or 0.52 percent, to 2,451.24. The Russell 2000 index rose 3.34, or 0.47 percent, to 719.55.

Advancing issues outnumbered decliners by about 3 to 2 on the New York Stock Exchange, where consolidated volume amounted to a light 3.70 billion shares, compared with 3.94 billion shares traded Wednesday.

Bond prices rose as some investors sought the safety of government debt despite the gains in stocks. The yield on the benchmark 10-year Treasury note, which moves opposite its price, fell to 3.78 percent in late trading from 3.85 percent late Wednesday.

Gold prices rose, while the dollar declined against most other major global currencies.

Mixed economic readings and lofty energy prices could keep the market in a holding pattern through the summer, said Janna Sampson, director of portfolio management at Oakbrook Investments. "With oil high and continuing to go up, it's going to be tough to get the market to have a sustainable rally."

Alfred E. Goldman, chief market strategist at Wachovia Securities, was a bit more optimistic, saying he estimates the economy is four months away from the end of an average-length recession, so the stock market should resume its climb again soon.

In a positive sign for the U.S. employment picture, which has seen four straight months of jobs losses, the Labor Department said yesterday the number of newly laid off workers seeking unemployment benefits dropped by 18,000 last week to 365,000 -- a larger decline than expected.

Aluminum producer Alcoa Inc. rose $1.56, or 4.1 percent, to $39.65. Oil companies also gained; Exxon Mobil Corp. rose $1.11 to $89.93, while Chevron Corp. was up $2.11, or 2.3 percent, at $97.44.

Wal-Mart Stores Inc. rose 33 cents to $57.16, but Target Corp. fell $1.10, or 2.1 percent, to $52.34 after saying its same-store sales rose in April by an amount that was smaller than analysts forecast.

A weak U.S. consumer weighed on Toyota Motor Corp., which said late Wednesday that profit tumbled 28 percent due to the rising yen and weak North American sales, and predicted sales will drop for the fiscal year through March 2009 for the first time in several years. Toyota's U.S.-traded shares fell $4.20 or 4 percent to $100.56.