Wall Street ended mixed Wednesday as a surprisingly strong report on the industrial sector was offset by another jump in energy prices.
Treasury bond yields were little changed, while gold futures hit a fresh 17-year high.
Stocks rallied in the morning, faded at midday, then rebounded in the final two hours of trading. The Dow Jones industrials closed up 16.88 points, or 0.2%, at 10,473.09.
The government said durable-goods orders shot up 3.3% in August after falling 5.3% in July. Economists had expected just a minimal gain last month.
The larger-than-forecast increase in orders suggested that businesses could step up investments after pausing in the wake of hurricanes Katrina and Rita, some analysts said.
“The underlying tone, at least in the business sector of our economy, is still very strong,” said Timothy Leach, chief investment officer at U.S. Trust Corp.
But worries about energy prices continued to dog the equity market. Futures prices for natural gas, gasoline and crude oil surged Wednesday on concerns about supplies in the near term, with much of Gulf of Mexico production shut in.
Near-term crude oil futures rose $1.28 to $66.35 a barrel.
Some analysts, however, say the stock market’s ability to rally late in the day showed underlying strength.
“There are still some significant headwinds out there, but I have to say, the market has held up pretty well,” said Russ Koesterich, a portfolio manager at Barclays Global Investments in San Francisco.
“But ... we’re still stuck in the same trading range we’ve seen for months, and it’ll take better news to break out of it,” he said.
The Standard & Poor’s 500 index added 1.23 points, or 0.1%, to 1,216.89. The Nasdaq composite slid 1.02 points, or 0.1%, to 2,115.40.
Rising stocks had a slight edge over losers on the New York Stock Exchange, while losers dominated on Nasdaq.
With two trading days left in the third quarter, the Dow is down 2.9% year to date, the S&P; 500 is up 0.4% and Nasdaq is down 2.8%.
The S&P; 600 index of smaller stocks, which lost 0.3% on Wednesday, is up 4.9% year to date.
Some investors turned to gold -- a traditional inflation hedge -- as energy costs continued to advance and as the dollar’s value slipped. Near-term gold futures in New York rose $7.10 to $469.70 an ounce, a 17-year high. Gold has jumped $36 this month.
In the bond market, however, investors were little fazed by the latest rise in energy prices. The yield on the benchmark 10-year Treasury note slipped to 4.26% from 4.28% on Tuesday.
In other market highlights:
* Shares of mortgage lenders were under pressure on concerns that some borrowers may have overstretched to buy homes amid the price boom. In one sign of financial stress, credit card delinquency rates hit a record in the second quarter, the American Bankers Assn. said.
Rumors of new accounting woes at mortgage giant Fannie Mae also weighed on the sector. Fannie Mae plunged $4.99 to $41.71.
Among mortgage issuers, Downey Financial lost $1.72 to $60.39, NovaStar Financial dropped $1.07 to $32.20 and Countrywide Financial fell 45 cents to $32.76.
Impac Mortgage Holdings edged up 11 cents to $12.18. After regular trading Tuesday, the lender cut its dividend rate, citing lower earnings expectations. But the company had previously warned investors the dividend might be reduced.
* Shares of Tribune, owner of the Los Angeles Times, slid $1.53 to $34.22, their lowest level since 2001. Late Tuesday, a U.S. Tax Court judge said Tribune owed taxes on two business deals executed by Times Mirror, which Tribune purchased in 2000. Chicago-based Tribune said it would appeal, but the tax hit could be about $1 billion.
* Some mining issues attracted buyers. Phelps Dodge surged $5.98 to $131.13 and Rio Tinto gained $6.25 to $166.90.
* Genentech shares jumped $3.49 to $83.35, more than recouping Tuesday’s losses, as it became clear that a challenge to an important patent the firm holds might take years to play out before that patent could be declared invalid.
* Apple lost $2.36 to $51.08. The maker of iPod music players was downgraded to “neutral” by a Merrill Lynch analyst.
* Paychex added $3.16, or 9.3%, to $37.25. The provider of payroll services for businesses raised its fiscal 2006 sales and profit forecasts.
* MedImmune gained $1.65 to $33.23. The maker of the FluMist nasal spray will benefit from the development of more drugs and the introduction of vaccines, a Lehman Bros. analyst wrote.
Teradyne climbed 74 cents to $15.99 after the world’s largest maker of semiconductor-testing equipment was boosted to “overweight” from “neutral” by a JPMorgan analyst.
* Eastman Kodak lost 12 cents to $24.89 after it said lower-than-expected earnings growth at its health group and a slower U.S. economy would hurt results this year. The stock is down 23% this year.
* Video game maker Activision rose as high as $20.35 but ended down 24 cents at $19.76 after saying it would split its stock 4-for-3.