updated 9/15/2004 10:00:35 AM ET 2004-09-15T14:00:35

Stocks finished Tuesday’s lackluster session slightly higher, as many investors opted to stay on the sidelines of the stock market after a disappointing report on U.S. retail sales and another increase in crude oil prices.

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With Hurricane Ivan threatening oil rigs in the Gulf of Mexico, crude futures moved higher for the second straight day. A barrel of light crude settled at $44.39, up 52 cents, on the New York Mercantile Exchange.

Sluggish automotive sales resulted in a 0.3 percent drop in retail sales for August, worse than the 0.1 percent economists had expected. However, when auto sales were removed from the equation, sales were actually up slightly for the month — though not enough to completely assuage Wall Street’s concerns or encourage most investors to make new buys.

“People are very hesitant to make mistakes. To make a commitment right now, it’s like being in a life raft out in the middle of the ocean by yourself,” said Michael Murphy, head trader at Wachovia Securities in Baltimore. “Until we get some good news, it’s just going to be like this. People looking for reasons not to buy stocks.”

The Dow Jones industrial average rose 3.40 points, or 0.03 percent, to 10,318.16, while the broader Standard & Poor’s 500-stock index advanced 2.51 points, or 0.2 percent, to 1,128.33. The Nasdaq composite index, full of technology shares, added 5.02 points, or 0.3 percent, and closed at 1,915.40.

While the overall retail sales report from the Commerce Department was disappointing, diffusing the positive momentum from July’s 0.8 percent increase, the reading was better once auto sales were removed. Without them, retail sales rose 0.2 percent for the month, in line with Wall Street’s expectations.

However, with consumers unwilling to spend on big-ticket items like cars, Wall Street was concerned that they remained nervous about the economy and may cut their spending further.

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“It’s no mystery that consumers are spending more on energy and fuel costs, and that’s started to filter down,” said Scott Wren, equity strategist for A.G. Edwards & Sons. “What this boils down to is we need something that’s going to encourage consumers and help drive spending. We need to see better job growth and a better overall economy.”

Investors sent U.S. automakers’ shares lower on the cloudy outlook; Ford Motor Co. and General Motors Corp. have already cut back production on 2005 models due to soft demand. Ford lost 12 cents to $13.98 and General Motors fell 35 cents to $42.65, while DaimlerChrysler AG edged 2 cents higher to $43.53.

Other sectors that lost ground Tuesday included materials and utility stocks, while healthcare, consumer discretionary stocks and technology made modest gains.

Many retailers are already adjusting their outlooks to reflect lower consumer spending. Office Depot Inc. said it expects its third-quarter earnings to fall below Wall Street estimates, and cut its full-year outlook due to slumping sales. Office Depot tumbled $1.10 to $15.10.

Supermarket chain Kroger Co. was down 72 cents at $15.98 after reporting a 25 percent drop in earnings for the second quarter, blaming the decline on higher debt payments and a grocery workers strike. The company missed Wall Street expectations by 8 cents per share.

Home decor chain Pier 1 Imports Inc. saw its sales fall in the latest quarter, sending its earnings 43 percent lower from a year ago. While Pier 1 beat analysts’ forecasts by a penny, the company lowered its 2004 outlook. Pier 1 nonetheless gained $1.06 to $18.90.

McDonald’s Corp. rose 43 cents to $27.60 after the fast-food company raised its annual dividend from 40 cents to 55 cents, a $690 million increase in its payout to investors.

Software maker Oracle Corp. closed 7 cents lower at $10.55 prior to its latest quarterly earnings report, which came out after the regular trading session ended.

Overseas, Japan’s Nikkei stock average rose 0.4 percent. In Europe, Britain’s FTSE 100 closed down 0.3 percent, France’s CAC-40 dropped 0.5 percent for the session and Germany’s DAX index slipped 0.1 percent.

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

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