Stocks close mixed in cautious trading

NEW YORK » Wall Street closed narrowly mixed yesterday as investors traded cautiously ahead of the U.S. Labor Department's reading tomorrow on December employment. Inflation jitters remained high as oil prices set a new trading record above $100.

Investors who sent stocks skidding Wednesday amid economic concerns and rising oil prices initially took some solace in findings released yesterday by payroll company Automatic Data Processing.

The ADP report said the economy added 40,000 private sector jobs last month, above the 30,000 forecast of economists polled by Dow Jones Newswires.

Also yesterday, the Labor Department said the number of newly laid off workers seeking unemployment benefits fell last week. But investors were mindful that these weekly readings can be volatile, and the latest reflected unusual factors related to the Christmas holiday.

"There was nothing that was really that helpful in the economic reports yesterday. The jobless claims were a little bit better, but they're still in a sideways pattern ... and the four-week average keeps moving up," said Linda Duessel, market strategist at Federated Investors in Pittsburgh.

Wall Street has for weeks been holding out for tomorrow's December jobs snapshot. The Labor Department report should indicate whether the solid job market that existed last year can continue into 2008 and help sustain consumer spending. A slowdown in spending among consumers fearful of losing their jobs, or not being able to find new ones, would be regarded as a heavy blow to the economy.

Meanwhile, oil set a fresh record of $100.09 a barrel on the New York Mercantile Exchange after government figures showed a larger-than- expected decline in crude oil inventories. Analysts said more expensive oil is stirring some concerns about rising prices in general and whether the Federal Reserve would still have room to lower interest rates.

Light, sweet crude, easing back from its record with the normal ebb and flow of trading, settled down 44 cents at $99.18 a barrel on the Nymex.

"We are worried about inflation," said Nicholas Raich, director of equity research at National City Private Client Group in Cleveland. "That's probably the biggest risk in 2008."

The Dow Jones industrial average rose 12.76, or 0.10 percent, to 13,056.72, after moving higher and lower over the course of the session.Broader stock indicators were mixed. The Standard & Poor's 500 index was unchanged at 1,447.16, and the Nasdaq composite index slipped 6.95, or 0.27 percent, to 2,602.68.

The Russell 2000 index of smaller companies fell 8.54, or 1.13 percent, to 745.01.

Advancing issues outnumbered decliners by about 8 to 7 on the New York Stock Exchange, where volume came to 1.32 billion shares.

Bond prices rose as stocks retreated from earlier highs. The yield on the benchmark 10-year Treasury note, which trades opposite its price, dipped to 3.89 percent from 3.91 percent Wednesday. The dollar was mixed against other major currencies, while gold prices rose.