Investors focus
on high oil prices

NEW YORK » Uneasy investors kept stocks mixed yesterday, taking profits as oil prices rose and Wall Street grew more anxious about the upcoming elections in Iraq. A fresh round of positive earnings and reports of a takeover bid for AT&T Corp. were largely overlooked.

The rare opportunity to lock in gains in a disappointing January was too tempting for many investors to ignore. A mix of economic data -- lower-than-expected unemployment and a somewhat disappointing report on factory orders -- did not provide a boost to keep the markets in positive territory for a third straight session.

Investors were also concerned about oil prices, which once again pushed toward $50 per barrel ahead of this weekend's OPEC meeting. A barrel of light crude was quoted at $48.84, up 6 cents, on the New York Mercantile Exchange.

"The past couple of days have seen some improvement, but it's been very tepid, almost a stealth rally," said Ken Tower, chief market strategist for Schwab's CyberTrader. "With the downtrend we've been in this month, I don't think anybody's feeling any urgency to put money to work here."

The Dow Jones industrial average fell 31.19, or 0.3 percent, to 10,467.40.

Broader stock indicators rose modestly. The Standard & Poor's 500 index was up 0.48, or 0.04 percent, at 1,174.55, and the Nasdaq composite index gained 1.06, or 0.05 percent, to 2,047.15.

Despite strong earnings, the markets have struggled to post gains so far this month -- all three major indexes have risen in only seven of January's 18 sessions. Concerns about the economy, the Federal Reserve's stance on interest rates and rising oil prices have all weighed heavily on the markets.

"The sentiment indicators were very strong in November and December, and people I think were just too optimistic," said Richard Driehaus, chairman and chief executive of Driehaus Capital Management Inc. "This is a very tenuous market, and you don't want to be too bold here."

The Labor Department said first-time jobless claims rose by 7,000 to 325,000 last week, less than the 333,000 economists expected. That bolstered Wall Street's hopes that next week's monthly job creation report would show decent job growth.

Orders for durable goods -- products designed to last at least three years -- rose 0.6 percent in December, a decline from the 1.8 percent gain in the previous month and less than the 0.9 percent Wall Street had expected. Sharp drops in aircraft and defense orders kept the gains minimal.