Wall Street wavered Wednesday, leaving stocks mixed as oil prices soared on bleak inventory data and investors digested a disappointing earnings report from J.P. Morgan Chase & Co. Blue chips were pressured, but tech shares advanced on semiconductor stocks.
A shortfall in gasoline and heating oil pushed crude prices back above the $54 level, solidly reversing a two-day retreat. Inventories of distillate fuels, which include heating oil and diesel, fell for a fifth week, renewing worries that high energy prices will eventually slow consumer spending and dent corporate bottom lines. The data also distracted investors from a slew of profit reports.
"This will go down as the earnings season that fell on deaf ears," said Arthur Hogan, chief market analyst at Jefferies & Co. "The major news is oil prices and what that will do to consumer demand, the economy, corporate profits and the future. That's the driver. Does it have an effect? It is the focus. It's larger than earnings, and right now it's larger than the election."
The Dow Jones industrial average sagged 10.69 points, or 0.1%, to 9,886.93.
The broader gauges were higher. The Standard & Poor's 500 index added 0.43 point, or less than a tenth of a percent, to 1,103.66. The Nasdaq composite index closed up 10.07 points, or 0.5%, at 1,932.97, partly because of strength in the chip sector. The Philadelphia semiconductor index advanced 1.3% a day after IBM delivered better-than-expected earnings and an upbeat forecast for high-tech spending.
Growing concern about how much energy prices will weigh on the economy in the months ahead kept Wall Street's attention riveted on oil prices. Fears about a narrowing global supply cushion sent crude dashing from $35 a barrel to $55 a barrel in just seven weeks, and the fact that oil remains at lofty levels has cast a long shadow over stocks. The government's inventory report, which showed lower-than-expected supplies of crude and refined products, sent near-term oil futures surging $1.63 to settle at $54.92 in New York trading.
A number of other factors were pressuring stocks as well, including the investigation of the insurance industry by the New York attorney general's office, recent negative news for big drug makers and general uncertainty surrounding the presidential race. Investors have also been watching earnings for signals that the economy might pick up before the end of the year, but indicators have been mixed so far.
"In view of all of the worries, the election, oil being stubbornly above $50 a barrel, for the market to be where it is is pretty impressive," said Barry Berman of Robert W. Baird & Co. in Milwaukee. "Any catalyst, I think, could really get the market going. I think there's a lot of buying power out there; it's just a matter of having the courage to step in."
In other market highlights:
* Benchmark U.S. Treasury yields fell below the 4% threshold as technical jostling among traders for market positions raised their prices (bond yields fall as their prices rise). Traders were generally impressed that prices rose after the rise in inflation reported Tuesday. "This is a very unusual market," said Mark Mahoney, Treasury strategist at UBS. "The fundamentals are clearly stacked against it, and yet it manages to recover every day after a sell-off." The yield on the 10-year note fell to 3.98%, from 4.03% on Tuesday.
* J.P. Morgan Chase shed 73 cents to $37.25 after reporting a 13% drop in third-quarter profit, in part because of costs related to its merger with Bank One. Other financial shares slipped, with Citigroup losing 30 cents to $43.29 and Bank of America shedding 64 cents to $43.72.
* Motorola, the world's second-largest maker of mobile phones, slumped $1.41 to $17.09. The company said its market share dropped in the third quarter as Nokia cut prices. Despite its overall problems, Motorola reported a profit for its mobile phone chip unit, Freescale Semiconductor Inc.
* Other chip makers gained for a fourth day. Intel added 65 cents to $21.45. Texas Instruments, which reported better-than-expected earnings Tuesday, gained 32 cents to $22.87. Qualcomm rose 61 cents to $43.41.
* Energy stocks rose along with the price of oil. ExxonMobil advanced 56 cents to $48.87. Valero Energy jumped $1.52 to $42. Noble, which drills for oil and natural gas in waters off five continents, rose $1.80 to $46.28.
* Honeywell lost $1.64 to $33.80 after saying fourth-quarter profit might be less than analysts expect.