Stocks Mixed On Oil Price Drop, Interest Rate Worries

Prices closed barely mixed on Wall Street Wednesday as oil prices dropped sharply and interest rate worries limited the market's gains.

The major indexes were down for much of the day as investors fretted over high U.S. bond yields and possible rate increases in Europe and Japan. By afternoon, sectors including health care, technology and energy rebounded.

The Dow rose 25.05, or 0.23 percent, to 11,005.74.

Broader stock indicators were barely mixed. The S&P 500 index rose 2.59, or 0.2 percent, to 1,278.47, and the Nasdaq composite index fell 0.92, or 0.04 percent, to 2,267.46.

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The Dow Jones industrial average and the Standard & Poor's 500 rose in response to a sharp drop in crude oil futures, which declined after a report of strong U.S. petroleum inventories. A barrel of light crude settled at $50.02, down $1.56 on the New York Mercantile Exchange.

"Inventories were at the highest level they've been in six or seven years," said Brian Bush, director of equity research, Stephens Inc. "A decline in the price of crude bodes well" for curing inflation fears.

The Nasdaq composite index dipped slightly as Google Inc. (GOOG) continued a streak of erratic trading, falling sharply after the company mistakenly posted an internal financial outlook that included its concerns about narrowing profits.

Advancing issues barely edged out decliners on the New York Stock Exchange.

The market has been skittish since the beginning of March, with the S&P 500 declining for the previous four straight sessions as bond yields hit highs not seen since June 2004. But the declines created a buying opportunity, Bush said.

"After four days of decline, the market was near-term oversold," he said.

The critical release this week will be Friday's average hourly wage number, said Philip S. Dow, managing director of equity strategy at RBC Dain Rauscher in Minneapolis. "If that shows not much in the way of inflation, we could have a pretty good rally here."

The wage figures will be released as part of the Labor Department's monthly employment report; the data will also include the number of jobs created last month.

Bonds rose slightly, with the yield on the 10-year Treasury note falling to 4.73 percent, down from 4.74 percent late Tuesday. The U.S. dollar was lower against other major currencies. Gold prices dropped.

In company news, Exxon Mobil Corp., the world's largest publicly traded oil company, fell 14 cents to $59.71 after its forecast Wednesday that the company's spending on oil and gas drilling, refining and chemicals manufacturing would rise from about $18 billion now to almost $20 billion a year between 2007 and 2010.

Google fell $10.57, or 2.9 percent, to $353.88 after it mistakenly posted an internal financial forecast on its Web site. The projections included a reference to management's concerns about the online search engine leader's profits narrowing amid tougher competition.

The New York Stock Exchange went public Wednesday after closing its $10 billion acquisition of electronic rival Archipelago Holdings Inc. on Tuesday. The new NYSE Group Inc., trading under ticker symbol NYX, rose $15.75 to $80 a share in its first day of trading. Going public will help the exchange expand into new businesses, such as derivatives trading, and could fund acquisitions as well. Archipelago closed at $64.25 Tuesday, its last day as a stand-alone company.

Electricity producer Dynegy Inc. posted a profit in the fourth quarter, reversing a year-ago loss, but it lowered its financial targets for 2006. Its stock fell 17 cents to $4.78 after it forecast a loss of $65 million to $130 million for the year, versus a prior range of $5 million to $75 million.

Volume on the NYSE came to 1.77 billion shares, up from 1.67 billion at the same time Tuesday.

The Russell 2000 index of smaller companies rose 0.78, or 0.11 percent, to 721.84.

Overseas, Japan's Nikkei stock average fell 0.63 percent. Britain's FTSE 100 fell 0.76 percent, Germany's DAX index lost 1.15 percent, and France's CAC-40 slid 0.45 percent.