NEW YORK – Stocks rose modestly Thursday as investors weighed persistent concerns about record oil prices against a series of new corporate acquisitions and a reorganization at Eastman Kodak Co (EK ).
The Dow Jones industrial average (search) ended up 15.76 points, or 0.15 percent, at 10,450.63. The Standard & Poor's 500 index (search) rose 2.78 points, or 0.23 percent, to 1,212.37. The technology-laced Nasdaq Composite Index (search) gained 5.46 points, or 0.26 percent, to close at 2,134.37.
"We've had very good company news, both on earnings and on deal fronts," said Noah Blackstein, a portfolio manager at Dynamic Power American Fund in Toronto. "But demand for stocks has been faltering as the rise in oil prices accelerated."
Crude oil for October delivery settled at $67.49 a barrel, up 17 cents, after earlier climbing intraday to a record $68 per barrel on the New York Mercantile Exchange (search). Oil prices rose late in the day on news that Gulf of Mexico operators were preparing to move nonessential rig personnel due to Tropical Storm Katrina.
General Electric Co.'s (GE) $1.6 billion investment in a Turkish bank and Johnson Controls Inc.'s (JCI) takeover of York International Corp. assured investors that corporate America is still willing to spend money to expand, even in uncertain economic times.
Yet oil again weighed on investors.
"Oil prices at these levels are providing all kinds of dislocation issues for stocks," said Joseph Battipaglia, chief investment officer at Ryan Beck & Co. "Earnings and the economic data are OK, but with oil where it is, the market is unable to make a decision, long or short, and there's certainly no real catalyst for buying."
Shares of Exxon Mobil Corp. (XOM), the world's largest publicly traded oil company, gained 0.5 percent, or 30 cents, to $59.18, helping both the Dow and the S&P 500.
The Dow also gained from Johnson & Johnson's (JNJ) announcement that it expects a decision in October on whether the Federal Trade Commission will approve its planned acquisition of Guidant Corp. (GDT). Johnson & Johnson rose 0.5 percent to $62.53.
Among health-care stocks that climbed in sync with Johnson & Johnson were AmerisourceBergen (ABC), the No. 3 U.S. drug distributor, up 3.4 percent, or $2.40, at $72.74, and Forest Laboratories Inc. (FRX), up 4.7 percent, or $2.01, at $44.44, both in NYSE trading.
A drop in unemployment claims also assuaged investors. The Labor Department reported that first-time jobless claims dropped by 4,000 to 315,000 last week, and that the four-week average of claims fell to its lowest level in four years.
A debt downgrade helped push Dow component General Motors Corp. (GM) lower. Moody's Investors Service cut its ratings on the debt of General Motors Corp. and its finance arm, General Motors Acceptance Corp., late on Wednesday. GM shares fell 0.5 percent, or 18 cents, to $34.09.
For GM, the impact of the Moody's downgrade was partly offset by an announcement that the world's largest automaker is extending its popular program of employee discounts for everyone on vehicle sales.
Moody's also cut the debt of GM's rival Ford Motor Co. (F) to junk status after Wednesday's closing bell. Ford shares fell 1 percent, or 10 cents, to $9.82.
"Both GM and Ford already wear junk ratings by S&P, but the move nonetheless inspired stock sales," said Christopher Low, chief U.S. economist at FTN Financial in New York. "The assumption is that a downgrade may signal further deterioration since the first junk ratings were announced."
Investors welcomed General Electric's (GE) purchase of a 25.5 percent share in Garanti Bank (search ), Turkey's third largest privately owned bank, in an effort to expand its consumer finance business overseas. However, rising oil prices pressured industrial stocks, and General Electric fell 4 cents to $33.50.
York International (YRK) surged 37 percent, or $15.30, to $57.05 after Johnson Controls (JCI) announced a $2.4 billion, or $56.50 per share, cash buyout of the company, which would double Johnson's presence in building heating and air-conditioning markets. Johnson Controls, which will also assume $800 million in York debt, climbed $3.87 to $60.64.
Eastman Kodak (EK) said it will slash 900 jobs in Rochester, N.Y., and in China as it consolidates its color photographic paper manufacturing. Its Rochester plant will close by October, the company said, and the total effort will result in a $173 million write-off charge. Kodak edged 4 cents lower to $25.
Amusement park operator Six Flags Inc. (PKS) jumped 11 percent, or 72 cents to $7.26 after the company announced it will put itself up for sale. The company said it would invite shareholder Daniel Synder, the millionaire Washington Redskins owner who has been critical of Six Flags' performance, to participate in an auction, though it will oppose Synder's efforts to wage a proxy battle for more seats on the company board.
In earnings news, luxury home builder Toll Brothers Inc. (TOL) bested Wall Street's earnings forecasts by 8 cents per share in the third quarter, with profits doubling from a year ago as the demand for new homes continues apace. Toll Brothers nonetheless $1.90 to $48.10 after a sharp advance Wednesday.
Trading was light on the New York Stock Exchange, where advancers beat decliners by a ratio of about 7 to 5, with about 1.2 billion shares changing hands, down from the 1.46 billion daily average for last year.
On Nasdaq, gainers outnumbered decliners by a ratio of about 8 to 7, with about 1.34 billion shares changing hands, down from the 1.81 billion daily average last year.
The Russell 2000 index of smaller companies rose 2.69, or 0.41 percent, to 657.70.
Overseas, Japan's Nikkei stock average fell 0.78 percent. In Europe, Britain's FTSE 100 closed down 0.37 percent, France's CAC-40 lost 1.04 percent for the session, and Germany's DAX index tumbled 1.22 percent.
Reuters and the Associated Press contributed to this report.