Bargain hunting
prevents dropoff

NEW YORK » Wall Street stabilized yesterday, closing little changed although another spike in oil prices sent many investors to the safety of the bond market. Scattered bargain-hunting after the previous session's slide kept selling to a minimum.

The major indexes fluttered through a narrow range for most of the day as investors eyed the highs and lows of oil prices, which hit an intraday record of $57.60 before retreating 6 cents to settle at $56.40 on the New York Mercantile Exchange.

Richard Dickson, senior market strategist at Lowry's Research Reports in Palm Beach, Fla., said it was encouraging that stocks did not fall further after Wednesday's slide, which apart from oil was prompted by Wednesday's profit warning from General Motors Corp.

"What's fairly obvious though ... is that we haven't seen prices fall far enough to generate enough enthusiasm to make them break out of this funk," Dickson said.

The Dow Jones industrial average fell 6.72, or 0.06 percent, to 10,626.35. The Dow, which lost 112 points on Wednesday, was held back from a larger gain by new tumult at the big insurer American International Group Inc. and more fallout from Wednesday's profit warning at GM.

The broader indexes managed narrow gains. The Standard & Poor's 500 index was up 2.14, or 0.18 percent, at 1,190.21, and the Nasdaq composite index gained 0.67, or 0.03 percent, to 2,016.42.

The bond market pushed higher for a second session as investors moved out of stocks and into less risky investments. The yield on the 10-year Treasury note fell to 4.46 percent from 4.51 percent late Wednesday. Gold prices fell, while the dollar edged higher against most major currencies.

OPEC this week pledged to increase its output, but said yesterday the growing economies of the United States, China and Japan would keep demand ahead of supply this year -- keeping upward pressure on prices.

Investors worry that high energy prices could hurt economic growth and yet stoke inflation, prompting the Federal Reserve to turn more aggressive in raising interest rates. However, some investors are betting that the current oil prices are an aberration caused by speculation, and that prices will moderate.

"I got my fingers crossed that inventories are going to build and OPEC is going to manage to squeeze out another million barrels a day," said Henry Herrmann, chief investment officer at Waddell & Reed Financial, a mutual-fund company in Overland Park, Kan.