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Despite oil price gyrations, stocks trade in narrow range

NEW YORK - Wall Street stabilized Thursday, closing little changed although another spike in oil prices sent many investors to the safety of the bond market. Scattered bargain-hunting after the previous session's slide kept selling to a minimum.

The major indexes fluttered through a narrow range for most of the day as investors kept an eye on the highs and lows of oil prices, which hit an intraday record of $57.60 before retreating 6 cents to settle at $56.40 on the New York Mercantile Exchange.

Richard Dickson, senior market strategist at Lowry's Research Reports in Palm Beach, said it was encouraging that stocks did not fall further after Wednesday's 112-point slide, which apart from oil was prompted by Wednesday's profit warning from General Motors Corp.

But Dickson added, "We haven't seen prices fall far enough to generate enough enthusiasm to make them break out of this funk."

The Dow Jones Industrial Average fell 6.72, or 0.06 percent, to 10,626.35. The Dow, which lost 112 points on Wednesday, was held back from a larger gain by new tumult at the big insurer American International Group Inc. and more fallout from Wednesday's profit warning at GM.

The broader indexes managed narrow gains. The Standard & Poor's 500 index was up 2.14, or 0.18 percent, at 1,190.21, and the Nasdaq composite index gained 0.67, or 0.03 percent, to 2,016.42.

The bond market pushed higher for a second session as investors moved out of stocks and into less risky investments. The yield on the 10-year Treasury note fell to 4.46 percent from 4.51 percent late Wednesday. Gold prices fell, while the dollar edged higher against most major currencies.

OPEC this week pledged to increase its output, but said Thursday that the growing economies of the United States, China and Japan would keep demand ahead of supply this year - keeping upward pressure on prices.

Among investors' concerns was that high energy prices could hurt economic growth and yet stoke inflation, prompting the Federal Reserve to turn more aggressive in raising interest rates. However, some investors are betting that the current oil prices are an aberration caused by speculation, and that prices will moderate.

Investors were also uncertain about Standard & Poor's plan to rebalance its 500 index today to make it better reflect the number of publicly traded shares of each company.

[Last modified March 18, 2005, 00:42:17]