Stocks Inch Up on News of Gulf Oil Discovery

U.S. stocks rose Tuesday in thin trading as a gain in Chevron Corp. (CVX) on news it tapped an oil reserve deep in the Gulf of Mexico outweighed a drop in Viacom Inc. (VIA) after the media company's chief executive quit.

The Dow Jones industrial average was up 5.13 points, or 0.04 percent, at 11,469.28. The Standard & Poor's 500 Index was up 2.24 points, or 0.17 percent, at 1,313.25. The Nasdaq Composite Index was up 12.54 points, or 0.57 percent, at 2,205.70.

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The Nasdaq was boosted by a sharp bounce in Sears Holdings (SHLD) Corp. Credit Suisse analyst Gary Balter noted that Sears had stepped up its share buybacks last month after repurchasing just 700,000 in its recent second quarter.

Sears stock rose 4.2 percent to $151.80.

Trading volume was tepid, with only 1.34 billion shares changing hands, far below last year's daily average of 1.61 billion, while on Nasdaq, about 1.76 billion shares traded, below last year's daily average of 1.80 billion.

"Everybody was expecting the stock markets to open this week with a big bang, but it doesn't work exactly like that. People are still switching on after the holiday," said Victor Pugliese, managing director and head of New York Equity Trading at First Albany Corp.

News of the successful drilling kept Chevron shares aloft as other oil stocks declined. U.S. crude oil futures fell on a weaker gasoline market as the Labor Day weekend signaled the winding down of the U.S. summer driving season. October futures fell 54 cents to $68.65 a barrel.

"The big news of the day was the oil drilling in the Gulf; it definitely helps shares in Chevron and Devon, but does not necessarily help the entire energy group, as it may help push oil prices down," Pugliese said.

Advancing stocks outnumbered declining ones by a ratio of 7 to 5 on the NYSE and by 8 to 5 on Nasdaq.

Viacom, which owns MTV Networks and Paramount Studios, was the top percentage loser on the S&P 500 index, falling 5.6 percent to $34.89 after it said Chief Executive and President Tom Freston resigned.

Chevron shares advanced 2.3 percent to $66.34. Analysts said the find in the Gulf's deep waters suggested there may be more oil in the region.

Chevron is the operator of the well and has a 50 percent working interest, while Devon Energy and Norway's Statoil each own a 25 percent working interest.

Devon shares jumped 12.5 percent to $72.14 while U.S.-listed shares of Statoil rose 2.4 percent to $28.17.

Procter & Gamble fell 0.6 percent to $61.56 and was among the biggest drags on the Dow and Standard & Poor's 500 stock gauges as the consumer products maker confirmed quarterly sales and profit forecasts. Investors had expected a switch to the upper end of P&G's earlier forecast range, and shares had risen recently in anticipation.

Shares in heavy equipment maker Caterpillar Inc. led gains in the blue-chip Dow after the company said on Tuesday that it plans to raise prices in 2007. Caterpillar stock rose 3.6 percent to $69.68.

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