Oil Prices Help Lift Stocks to Mixed Close

Stocks struggled to a mixed close Wednesday as many investors remained nervous about the economy even as oil prices pulled back from record highs.

Long-term Treasury bond yields declined for a sixth straight session.

On Wall Street, major stock indexes rallied in the afternoon after a weak start. The market was helped as crude oil futures in New York fell sharply after a government report showing a rise in U.S. gasoline inventories.

Near-term crude futures had the biggest drop since June 28, sliding 3% to settle at $42.83 a barrel, down $1.32 from Tuesday’s closing price.

The government’s weekly report on oil and gasoline inventories showed that gasoline stocks were up 2.4 million barrels last week, to 210.1 million. Analysts had expected a decline.

“We may have seen prices peak now that the inventory picture has shifted,” said George Gaspar, an analyst with Robert W. Baird & Co. in Milwaukee.

The oil market also was cheered after Yukos, Russia’s largest oil exporter, said it was given access to funds needed for oil production and exports. Last week, legal and financial troubles at the company had helped to boost concerns about global crude supplies.

What’s more, the president of the Organization of the Petroleum Exporting Countries, Purnomo Yusgiantoro, said the cartel has spare production capacity that could be tapped to boost supplies. That reversed a statement he had made Tuesday, when he said that OPEC couldn’t pump more crude.

Falling oil prices helped to bring some investors back to the stock market in the final hours of trading Wednesday.

The Nasdaq composite index, down as much as 17 points early in the day, ended with a loss of 4.36 points, or 0.2%, at 1,855.06.

The Dow Jones industrial average finished up 6.27 points, or 0.1%, at 10,126.51, and the Standard & Poor’s 500 index lost 1.06 points, or 0.1%, to 1,098.63.

Falling stocks had a narrow edge over winners on the New York Stock Exchange; on Nasdaq, losers were in the lead by 5 to 4. Trading volume remained subdued.

“I think overall, we’re starting to see some settling down in the market” after the pullback that slammed prices in July, said Bill Groenveld, head trader for VFinance Investments.

Stocks slumped last month in large part because of concerns that the economy was slowing. More recent data have suggested that business activity was picking up again, but many investors are wary.

On Wednesday, an industry group reported that an index of activity in the services sector jumped in July. But an index of employment in the sector tumbled -- raising questions about the government’s report on July employment overall, due Friday.

Nervousness about the economy helped push more investors into bonds. The yield on the 10-year Treasury note dipped to 4.42% from 4.43% on Tuesday, its sixth consecutive decline.

Demand for bonds also was bolstered after a homemade bomb exploded at the offices of the company that runs the Athens city highway, raising concerns about terrorism at the coming Olympics.

The bond market will face a load of new securities next week: The Treasury said it would sell $22 billion of three-year notes Monday, $15 billion of five-year notes Wednesday and $14 billion of 10-year notes Thursday.

Among Wednesday’s market highlights:

* The technology sector remained weak, hurt by downbeat earnings reports from some Internet-related companies, including InterActive, which slumped $4.23 to $22.80.

Also, telecom firm Ciena warned that sales would fall significantly in the current quarter. Ciena dived 68 cents to $2.08.

* On the plus side, Prudential Financial rose 60 cents to $46.36 as it reported a fourfold increase in quarterly earnings.

* Energy stocks dropped with crude prices. Marathon Oil lost $1.12 to $36.55 and Valero Energy fell $2.87 to $72.33.

* Calabasas-based Countrywide Financial slid $3.27 to $68.28 after brokerage firm Morgan Stanley cut its rating on the stock to “equal weight” from “overweight,” citing the stock’s run-up this year.