Stocks keep rising
while oil prices slip

NEW YORK » Another sharp drop in oil prices helped Wall Street overcome profit-taking and extend its rally to a third straight session yesterday. The major indexes posted modest gains in a heavily-traded session.

Concern over China's decision to raise its benchmark interest rate for the first time in nine years pressured materials and energy stocks, as investors worried about slower demand from the world's fastest-growing economy. However, the move also encouraged selling in oil.

Oil prices dropped past $51 per barrel, continuing Wednesday's sharp retreat and coaxing stock buyers back into the market in afternoon trading. A barrel of light crude closed at $50.92, down $1.54, on the New York Mercantile Exchange, the lowest close for oil futures since Oct. 4's price of $49.91 a barrel.

"Certainly, there's still a good amount of risk appetite in the market," said Chris Wolfe, global head of equities for J.P. Morgan Private Bank. "You're seeing people come back in despite the pressures, and as far as earnings go, so far so good."

After profit-taking kept the major indexes down through the morning, the Dow Jones industrial average ended up 2.51, or 0.03 percent, to 10,004.54. In the previous two sessions, the Dow had its first back-to-back triple-digit gains since May 2003.

Broader stock indicators were modestly higher. The Standard & Poor's 500 index was up 2.04, or 0.18 percent, at 1,127.44, and the Nasdaq composite index gained 5.75, or 0.29 percent, to 1,975.74.

The major indexes posted their first three-day stretch of gains since Sept. 10-14.

Unemployment questions weighed on some investors, as the Labor Department reported a sharp uptick in first-time jobless claims last week. The number of Americans filing for unemployment for the first time rose to 350,000, up 20,000 from last week -- the largest jump in a month.

In one of the more notable initial public offerings of the year, DreamWorks Animation SKG Inc. -- the studio responsible for the "Shrek" franchise -- jumped $10.75 from its $28 offering price to close at $38.75 per share.

Companies reporting earnings got a mixed reception yesterday, despite generally good numbers, as investors looked more at fourth-quarter forecasts than current results.

"I think companies' earnings have been overlooked," said Som Dasgupta, managing director of trading at PNC Bank in Pittsburgh. "Most of the S&P 500 has exceeded or met expectations. Valuations right now can be seen as pretty compelling."

Having enjoyed the sharp climb in oil prices through the third quarter, Dow component ExxonMobil Corp. posted record profits for the third quarter, beating analysts' increased forecasts by a penny per share. ExxonMobil, which said it was poised to break its records for full-year revenues and profits, nonetheless lost 34 cents to $48.61.