updated 8/5/2004 7:39:34 AM ET 2004-08-05T11:39:34

Wall Street waffled through an erratic session Wednesday, closing mixed as investors nervously watched oil prices but also allowed themselves to be encouraged by good economic news.

Major Market Indices

Stocks moved in the opposite direction from oil prices or much of the day, declining until early afternoon as crude climbed to $44.34 a barrel on the New York Mercantile Exchange. As oil fell below $43 on the way to a $42.83 close, Wall Street managed a late-session rally — but that advance quickly fizzled.

Still, the market’s tone kept analysts and traders optimistic about the market’s long-term prospects, though many cautioned that the typical summer doldrums would likely prevent a major rally this month.

“Yes, we have oil prices rising, but I think overall, we’re starting to see some settling down in the market,” said Bill Groenveld, head trader for vFinance Investments. “All the unknowns that drove the market down in July are starting to pan themselves out. There may be a malaise in the marketplace for a while, but it’s better than uncertainty.”

Stocks also received a boost from two key economic reports. Factory orders rose 0.7 percent in June, more than Wall Street expected. And the Institute of Supply Management’s service sector index for June rose more than economists had forecast.

The Dow Jones industrial average rose 6.27, or 0.1 percent, to 10,126.51.

Broader stock indicators were narrowly lower. The Standard & Poor’s 500 index was down 1.06, or 0.1 percent, at 1,098.63, and the Nasdaq composite index dropped 4.36, or 0.2 percent, to 1,855.06.

Although the rally lost wind at the end of the session, the Dow enjoyed its fourth late-day rally in the last six sessions.

Oil prices remain a concern, since higher fuel costs could trickle down to the consumer as food producers and major retailers will pay a higher cost in shipping.

Video: Latest market news “Combine (higher oil prices) with a slowdown in consumer spending, that makes it very hard for anyone to get into the market right now,” said Neil Massa, an equity trader at John Hancock Funds.

But Wednesday’s economic figures were an encouraging sign that the economy’s spring “soft spot” may not have lasted. Factory orders for June were higher than the 0.4 rise in May. And orders for durable goods rose 0.9 percent in June, up from a 0.9 percent decline in May, the Commerce Department said.

A key test for the economy and the markets will come Friday as the government releases the latest data on job creation. Next Tuesday’s Federal Reserve meeting will also be closely watched for signs that the Fed might back off on raising interest rates aggressively.

In the meantime, technology shared suffered as telecom company Ciena Corp. warned that sales would slump significantly in the third quarter. Ciena fell 68 cents, or 25 percent, to $2.08.

Prudential Financial Corp., whose headquarters was named in this week’s terror alert as a possible target, gained 60 cents to $46.36 as it reported a fourfold increase in quarterly earnings. The financial company posted earnings that were 19 cents a share more than expected.

CVS Corp. beat Wall Street estimates by 2 cents per share in its latest earnings statement, reporting a 17 percent rise in profits. The pharmacy chain was down 56 cents at $41.21.

Insurer Cigna Corp. fell $1.98 to $60.60 despite beating estimates by an impressive 50 cents per share. The company swung to a profit from a year-ago loss and boosted its earnings outlook as well.

Clothiers Polo Ralph Lauren and Tommy Hilfiger both managed to surpass expectations, with Polo Ralph Lauren doubling its profits on the strength of its women’s line, and Hilfiger posting a less-than-expected loss due to slumping wholesale revenues. Polo Ralph Lauren rose $1.44 to $34.56, while Hilfiger was up 49 cents at $13.78.

Declining issues barely outnumbered advancers on the New York Stock Exchange, where volume was light.

The Russell 2000 index of smaller companies was down 0.96, or 0.2 percent, at 542.67.

Overseas, Japan’s Nikkei stock average fell 1.2 percent. In Europe, Britain’s FTSE 100 closed down 0.5 percent, France’s CAC-40 dropped 1.2 percent for the session and Germany’s DAX index tumbled 1.4 percent.

© 2012 The Associated Press. All rights reserved. This material may not be published, broadcast, rewritten or redistributed.

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