NEW YORK – Investors' concerns about higher oil prices and rising interest rates kept stocks mixed Monday despite strong sales at Wal-Mart Stores and a better-than-expected reading of the nation's industrial activity.
The Dow Jones industrial average (search) ended down 17.76 points, or 0.17 percent, at 10,623.15. The Standard & Poor's 500 Index (search) was up 1.17 points, or 0.09 percent, at 1,235.35. The technology-laced Nasdaq Composite Index (search) was up 10.55 points, or 0.48 percent, at 2,195.38.
NYMEX crude oil futures ended up more than $1 and above $61 after hitting an all-time high on Monday following the death of Saudi Arabia's King Fahd and as traders worried over product supply after a series of refinery fires and run cuts in the U.S.
A barrel of light crude reached an intraday high of $62.30 before closing at $61.57, up $1, on the New York Mercantile Exchange (search). Higher oil prices are typically negative for stocks, as they boost corporate expenses and erode consumer discretionary spending.
"The price of oil is higher and that is a troubling risk factor," said Hugh Johnson, chief investment officer at Johnson Illington Advisors of Albany, New York.
Shares of oil companies rose. Exxon Mobil (XOM) rose nearly 1 percent to $59.23, while Chevron Corp. (CVX) moved up 42 cents to $58.43.
The technology sector saw a boost from online auctioneer eBay Inc. (EBAY), which climbed $1.83 to $43.61 after it received an upgrade from "neutral" to "buy" at Citigroup Smith Barney. Analysts there said the company's earnings were solid and that future trends looked positive.
U.S. Treasury debt prices retreated, pushing yields higher, after a second monthly gain in a key manufacturing index suggested the industrial sector was on the mend.
"The rise in treasury yields alongside high oil prices capped gains in the market," said Chris Burba, market analyst at Standard & Poor's. "The upgrade of eBay and news from Amgen prevented Nasdaq from slipping."
Meanwhile Wal-Mart's (WMT) July's sales came in at the high end of analysts' forecasts, and the Institute for Supply Management's (search) manufacturing index also came in ahead of expectations. But while the numbers were good, they also sparked concerns about the Fed and its policy of gradually raising the nation's benchmark rate. Wal-Mart rose 18 cents to $49.53
"What it's also doing is telling investors that the Fed is not done as quickly as people were thinking two months ago," said Russ Koesterich, senior portfolio manager at Barclays Global Investments in San Francisco. "That's creating a little bit of headwind for stocks."
Investors also saw cause for concern in a monthly report on U.S. manufacturing activity, though the report showed an overall rise in July manufacturing activity.
"Supplier deliveries declined, which is a little troubling," said Johnson. The headline index came in at 56.6 for July, up from 53.8 in June, but the supplier deliveries number fell to 51.8 from 53.1. Any numbers above 50 indicate growth.
Dow component Johnson & Johnson (JNJ), which is in the process of acquiring Guidant Corp. (GDT), closed up 1 percent at $64.50 after Guidant said it received U.S. approval to relaunch its top-selling implantable heart failure devices after a recall. Medical device maker Guidant rose nearly 4 percent to $71.32.
Procter & Gamble Co. (PG) saw a 9 percent rise in profits due to strong beauty, home care and health segments, and beat Wall Street's profit forecasts by a penny per share. P&G nonetheless fell 31 cents to $54.32 as the company issued a lower outlook for the third quarter.
As its highly successful employee discount program expires, General Motors Corp. (GM) will cut prices on 30 of its new 2006 models in an attempt to keep its sales from flagging, according to media reports. GM added 4 cents to $36.86, while Ford Motor Co. climbed 11 cents to $10.85 as it extended its own employee discount program through Sept. 6 and also cut prices.
Home Depot Inc. (HD) weighed on the Dow, falling 65 cents to $42.86 after it received a subpoena from federal prosecutors in Los Angeles for documents related to the company's handling of hazardous waste.
As its highly successful employee discount program expires, General Motors Corp. (GM) will cut prices on 30 of its new 2006 models in an attempt to keep its sales from flagging, according to media reports. GM added 10 cents to $36.92.
Advancers outnumbered decliners on both the Nasdaq and the New York Stock Exchange by a ratio of 1.2 to 1.
The Russell 2000 index of smaller companies was up 3.91, or 0.6 percent, at 683.66.
Overseas, Japan's Nikkei stock average rose 0.4 percent. In Europe, Britain's FTSE 100 was up 0.16 percent, France's CAC-40 gained 0.12 percent for the session, and Germany's DAX index climbed 0.09 percent.
Reuters and the Associated Press contributed to this report.