updated 1/17/2007 9:31:05 AM ET 2007-01-17T14:31:05

Wall Street ended an erratic session mixed Tuesday with the Dow Jones industrials reaching a third straight record close despite concerns about corporate profits and the impact of falling oil prices.

Major Market Indices

The market struggled to digest a drop in oil prices, which fell to a 19-month low near $51 a barrel on a report that OPEC leader Saudi Arabia said there may be no need for further production cuts. The statement punished shares of major oil and gasoline companies, though lower energy prices are a boon to consumers.

Investors also tried to reconcile conflicting views about the pace of corporate earnings. The first wave of reports have already shown strength, with Wells Fargo & Co. and TD Ameritrade Holding Corp. posting robust results.

But the market was still uneasy after profit warnings from companies including home builder Centex Corp. and software maker Symantec Corp. Investors also weighed a report from the New York Federal Reserve that the pace of manufacturing in its region reached its lowest level since the summer of 2005, although that appeared to have little effect on trading.

“The markets have had a big run-up, and it is really trying to continue on a positive pace while also alleviating some of the over bought characteristics before earnings really get going,” said Scott Fullman, director of investment strategy for Hapoalim Securities USA. “Lower oil has brought back confidence to the consumer, but the Dow has been hurt as it struggles with the drop in big oil companies.”

At the close of trading, the Dow rose 26.51, or 0.21 percent, to 12,582.59. The index reached a new trading high of 12,585.08 earlier in the session.

Broader stock indicators were mixed. The Standard & Poor’s 500 index was up 1.17, or 0.08 percent, at 1,431.90, and the Nasdaq composite index fell 5.04, or 0.20 percent, to 2,497.78.

The New York Fed’s Empire State Manufacturing index slipped to 9.1 in January from 22.2 in December, lending some support to the bond market, which had declined in recent sessions on expectations the U.S. Federal Reserve won’t cut rates because of signs of economic strength. Bonds rose Tuesday, with the yield on the benchmark 10-year Treasury note falling to 4.75 percent from 4.78 percent late Friday.

The dollar was mixed against other major currencies, while gold fell.

Oil slumped $1.78 to $51.21 on the New York Mercantile Exchange, the lowest it’s traded since May 2005. This sent shares of major oil companies lower. Exxon Mobil Corp. was down $1.03 at $71.63, and ConocoPhillips fell $1.02 to $62.81.

“The market is very much focused on some earnings stories that will be coming out, and the back-and-forth comes from that,” said Richard Cripps, chief market strategist for Stifel Nicolaus.

Wells Fargo, the fifth-largest U.S. bank, reported fourth-quarter profit surged 13 percent due to growth in its consumer and business lending units. Revenue also reached a record during the quarter. Shares rose 72 cents, or 2 percent, to $36.23.

Intel Corp. reported after the close that its fourth-quarter results beat expectations. The stock closed up 17 cents to $22.30, then added 26 cents in after-hours trading.

The results came after Advanced Micro Devices Inc. warned Friday it would miss expectations. AMD fell 13 cents to $18.13.

Commerce Bancorp Inc. plunged $2.89, or 8.3 percent, to $31.83 after announcing it is the target of an investigation by the Office of the Comptroller of the Currency and the Federal Reserve System. The company also reported fourth-quarter profit met expectations.

Symantec, which makes Internet security software, fell after it said 2007 profit will fall shy of Wall Street projections. The company blamed the miss on weak performance in its data center management business, causing shares to fall $2.69, or 13.2 percent, to $17.79.

Centex anticipates a loss from continuing operations of about $2 per share for the fiscal third quarter. The Dallas-based residential construction company also said it will reduce its housing inventory, and trim its work force to help cut future losses. Shares fell $1.55, or 3 percent, to $51.61.

Network equipment maker Cisco Systems Inc. fell 88 cents, or 3 percent, to $28.04 after analysts at Banc of America Securities and Prudential cut their investment ratings on the stock.

Declining issues outnumbered advancers by about 2 to 1 on the New York Stock Exchange, where volume came to 1.51 billion shares.

The Russell 2000 index of smaller companies was down 2.76, or 0.35 percent, to 791.50.

Overseas, Japan’s Nikkei stock average closed down 0.04 percent. At the close, Britain’s FTSE 100 was down 0.76 percent, Germany’s DAX index declined 0.22 percent, and France’s CAC-40 was down 0.70 percent.

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