Investors relieved by
drop in oil prices

NEW YORK » Wall Street finished an uncertain session mixed yesterday, encouraged by a drop in oil prices but worried about disappointing earnings from Time Warner Inc. The Standard & Poor's 500 index inched upward and reached a four-year high for the fourth time in six sessions.

One day after the S&P 500 and Nasdaq composite index broke through their June 2001 levels, investors appeared willing to wait for better news. With the Labor Department's jobs report due tomorrow and the Federal Reserve's latest decision on interest rates on Tuesday, investors were considered unlikely to bid stocks much higher in the meantime.

"I think this market is just going to have to grind higher, little by little, and probably sell off a little here and there, at least until the Fed meeting," said Scott Wren, equity strategist for A.G. Edwards & Sons.

While Time Warner's worse-than-expected results pressured stocks, investors were relieved by the drop in oil futures, coming as the government's latest petroleum inventory report showed a slight rise in crude stockpiles. After reaching a new intraday record of $62.50 early in the session, a barrel of light crude settled at $60.86, down $1.03 on the New York Mercantile Exchange.

The S&P 500 gained 0.92, or 0.07 percent, to 1,245.04, its best close since June 12, 2001.

Other stock indicators were narrowly mixed. The Dow Jones industrial average rose 13.85, or 0.13 percent, to 10,697.59, while the Nasdaq composite index lost 1.34, or 0.06 percent, to 2,216.81.

Bond prices rose as the Treasury Department announced the return of the 30-year bond, to be issued after a five-year hiatus. The yield on the benchmark 10-year Treasury note fell to 4.30 percent from 4.34 percent late Tuesday. The dollar fell against most major currencies, while gold prices rose.

Investors were disappointed in the latest reading of the Institute for Supply Management's services index. The ISM index, which measures growth in the service sector of the economy, fell to 60.5 in July, lower than the 61 reading expected by economists and down from 62.2 in June.

Even as oil prices fell, some analysts worried that the bullish earnings season is masking the effects that high energy prices could have on third- and fourth-quarter earnings.

"This market has reacted to earnings news without thinking about the effects that $60 a barrel oil could have on the third and fourth quarters and beyond," said Brian Bruce, director of global investments, PanAgora Asset Management Inc. in Boston.