U.S. blue-chip stocks declined Thursday as a jump in oil prices added to worries about inflation, but a rally in chip makers' stocks helped the Nasdaq advance late in the session to end at a six-year high.

The Dow Jones industrial average fell 52.39 points, or 0.41 percent, to end at 12,686.02. The Standard & Poor's 500 Index was down 1.25 points, or 0.09 percent, at 1,456.38.

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But the Nasdaq Composite Index rose 6.52 points, or 0.26 percent, to 2,524.94, its highest close since Feb. 15, 2001. Earlier, the Nasdaq hit a six-year intraday high at 2,531.42.

Home builders' shares fell after Toll Brothers Inc. (TOL) lowered its profit forecast and said it did not yet see a rebound going into the spring sales season.

"There are two pieces of the puzzle that are troubling. One is housing, and the other is oil menacingly poking its head up," said Hugh Johnson, chief investment officer of Johnson Illington Advisors, in Albany, New York. "The good news of declining gas prices had offset the drag on confidence and spending that came from the slowdown in housing, but now we may not get that helping hand."

Toll Brothers slid 2.8 percent, or 93 cents, to $31.93 on the New York Stock Exchange. The Dow Jones Home Construction index , which includes Toll Brothers, KB Home (KBH) and other home builders' stocks, dropped 1.9 percent.

Shares of subprime mortgage lenders continued hemorrhaging after a Merrill Lynch analyst warned that New Century Financial Corp. could face a cash crunch. Earlier this month, New Century forecast a surprising fourth-quarter loss and reduced past profit figures, based on rising defaults.

General Motors (GM) Corp.'s financing unit GMAC also fell victim to the subprime carnage after Merrill Lynch (MER) downgraded the lender's debt, citing its exposure to subprime mortgages.

GM's stock fell 2.1 percent, or 74 cents, to $34.63, making it one of the top drags on the Dow.

New Century shares fell 5.8 percent, or $1.01, to $16.54.

Novastar Financial shares fell 7.5 percent, or 76 cents, to $9.34 — nearly half the value the shares had two days ago.

U.S. crude for April delivery rose 88 cents to settle at $60.95 a barrel on the New York Mercantile Exchange, after rising more than $1 to a NYMEX session high at $61.25. Government data released Thursday showed a larger-than-expected drawdown in distillate supplies last week and a sharp drop in gasoline inventories that went against expectations.

Adding to jitters on the energy front, the International Atomic Energy Agency said that Iran had failed to meet a Feb. 21 deadline to suspend uranium enrichment, possibly leading to new sanctions for Tehran. Iran is the world's fourth-largest oil exporter.

A bright spot was the semiconductor sector. Chip makers' shares helped the Nasdaq reverse its earlier decline and end the session with a modest gain at its highest level in six years. Analog Devices Inc., a manufacturer of signal processors, reported stronger-than-expected profit late Wednesday, improving the earnings outlook for the semiconductor sector.

Analog's rivals, such as National Semiconductor Corp., Texas Instruments Inc. and Linear Technology Corp., also advanced.

Shares of Analog Devices shot up 10.4 percent, or $3.48, to $36.80 and ranked among the biggest percentage gainers on the NYSE.

National Semiconductor rose 7.4 percent, or $1.74, to $25.39 and Texas Instruments shares added 3.6 percent, or $1.11, to $32.09, also on the Big Board.

Linear Technology climbed 9.6 percent, or $3.00, to $34.37 and ranked No. 2 among the biggest contributors to the Nasdaq 100's rise.

The Philadelphia Stock Exchange semiconductor index

was up 2.8 percent, its biggest one-day percentage rise in more than three months.

Also helping the Nasdaq were shares of Whole Foods Market Inc. , a day after the organic grocer made a bid for smaller rival Wild Oats Markets Inc.

Whole Foods shares shot up 14 percent, or $6.41, to $52.11, while Wild Oats stock surged 17.1 percent, or $2.69, to $18.41. Wild Oats was among the Nasdaq's biggest percentage gainers.

Trading was moderate on the NYSE, with about 1.48 billion shares changing hands, below last year's estimated daily average of 1.84 billion, while on the Nasdaq, about 2.06 billion shares traded, slightly above last year's daily average of 2.02 billion.

Declining stocks outnumbered advancing ones by a ratio of about 6 to 5 on both the NYSE and the Nasdaq.

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