Stocks barely moved Wednesday as investors digested a batch of strong economic data that suggested continued strength in the recovery, but gains were tempered by worries about world oil supply after attacks on Iraq's oil pipelines.

The Dow Jones industrial average (searchdipped 0.85 of a point, or 0.01 percent, to 10,379.58, while the broader S&P 500 Index (searchrose 1.55 points, or 0.14 percent, to 1,133.56, and the Nasdaq Composite Index (searchadded 2.63 points, or 0.13 percent, to 1,998.23.

Energy stocks, led by Exxon Mobil Corp. (XOM), supported blue chips, as oil prices rose earlier in the day after pipeline attacks choked Iraq's ability to export oil. The Standard & Poor's Energy Index jumped 1.76 percent.

Oracle Corp. () weighed on the technology-heavy Nasdaq, even afterxpected stronger license sales.

A surge in manufacturing activity and better-than-expected data on housing construction failed to impress investors, who are preoccupied with two events expected at the end of the month: an interest rate hike and the handover of political power in Iraq. Analysts say the markets are likely to lurch sideways in the meantime.

"I think for the next several weeks, we're not likely to see major directional moves," said Jack Caffrey, equities strategist with J.P. Morgan Private Bank. "We're more likely to see a few days up and a few days down. It's going to be frustrating. But there will be some opportunities created, both to buy and to sell."

There was fresh evidence that the recovery of manufacturers is on track, as the Federal Reserve (search) reported a 1.1 percent surge in big industry production for May, the strongest showing in nearly six years. The advance well outpaced the 0.6 percent rise forecast by economists.

Also, builders broke ground on fewer housing projects in May, according to the Commerce Department (search), but the level of activity remained quite brisk, exceeding expectations. Total housing permits — a good barometer of current demand — were up 3.5 percent at 2.01 million units, the highest level in more than three decades.

"Investors are just sensitive to any type of inflation data that is out there and the economy overheating and the reaction that the Fed will have to that," said Owen Fitzpatrick, head of the U.S. Equity Group at Deutsche Bank Private Wealth Management. "Interest rates seems to be the dominant influence right now in equity prices."

The U.S. jobs picture showed signs of improvement in April and May, the Federal Reserve said in its "Beige Book" report, as potentially worrisome pressures on wages and consumer prices appeared tame.

Still, geopolitical worries overshadowed the strong data, after pipeline attacks shut down Iraqi oil exports.

"The situation with oil and Iraq continues to be a damper on everything," said Edgar Peters, chief investment officer at PanAgora Asset Management. "The attack on the Iraqi oil facilities is a negative for the market as a whole, and it's skewing sentiment too far in one direction, but it's definitely having an impact."

In the latest attack on Iraq's oil industry, saboteurs blew a hole in one of Iraq's two southern oil export pipelines Wednesday for the second time in 48 hours, an Iraqi oil source told Reuters. The source said the damage was "fairly big."

An Iraqi official said all crude oil exports from southern Gulf ports had stopped after saboteurs hit pipelines feeding the Basra and Khor al-Amaya terminals this week. Sabotage had already stopped exports via a northern pipeline to Turkey.

On the New York Mercantile Exchange (search), July crude oil futures settled up 13 cents at $37.32 a barrel. But the price of crude is still below the 21-year high hit on June 2, when it soared to a record high of $42.45.

U.S. Treasury bond prices fell, after the economic data led traders to lock in gains from Tuesday, and offered more evidence that an interest-rate increase from the Fed is in the wind. The price of the benchmark 10-year note slipped 12/32 to 100-5/32, pushing its yield up to 4.73 percent vs 4.68 percent late Tuesday.

Shares of Exxon Mobil (XOM), the world's biggest publicly traded oil company, added 65 cents, or 1.5 percent, to $44.73. Rival ChevronTexaco Corp. (CVX), the No. 2 U.S. oil company, gained $1.39, or 1.5 percent, to $91.99.

Shares of oil-services companies also shot higher, including Halliburton Co., up 97 cents, or 3.3 percent, at $30.35, and Schlumberger Ltd., up $2.43, or 4.1 percent, at $62.23.

Oracle (ORCL) topped the Nasdaq's most-active issues, falling 36 cents, or 3.1 percent, to $11.35, even after it reported late Tuesday its quarterly earnings rose 15 percent.

Best Buy Co. Inc. (BBY) shares fell, even after the electronics retailer reported its quarterly earnings jumped 65 percent, driven by sales of high-profit items.

Best Buy shares fell $1.04, or almost 2.0 percent, to $52.04. The company forecast higher earnings for the current quarter and full year, in line with estimates, but analysts worried the costs of Best Buy's customer loyalty plan and rising inventories could become a problem.

Delta Air Lines Inc. (DAL) shed 30 cents to $5.65 after chief executive Gerald Grinstein told analysts the carrier must cut costs to survive, saying he won't accept a new contract with pilots unless it includes all the cuts he's seeking. Delta has the highest pilot labor costs in the industry.

Bear Stearns Cos. (BSC) was down 75 cents at $78.68 after reporting a sharp rise in second-quarter earnings, beating Wall Street estimates by a wide margin. However, the brokerage warned that federal regulators are considering taking action over its mutual fund trading practices.

On the New York Stock Exchange (search), trading was moderate, with 1.17 billion shares changing hands, below the 1.4 billion daily average for last year. About 1.35 billion shares were traded on Nasdaq, also below last year's 1.69 billion daily average.

The Russell 2000 index, which tracks smaller company stocks, closed up 2.15, or 0.4 percent, at 570.07.

Overseas, Japan's Nikkei stock average finished 2.2 percent higher Wednesday. In Europe, France's CAC-40 rose 0.8 percent, Britain's FTSE 100 added 0.7 percent and Germany's DAX index gained 0.4 percent.

Reuters and the Associated Press contributed to this report.