updated 3/4/2005 8:24:06 AM ET 2005-03-04T13:24:06

Crude oil prices topped $55 per barrel Thursday, finishing at their highest level since late October and pressuring stock prices, leaving the market’s major indices mixed despite upbeat retail sales data and strong economic news.

Major Market Indices

Considering the huge rise in crude oil futures, the stock market performed surprisingly well analysts said. Only the Nasdaq composite index posted a loss due to volatility in the semiconductor sector. And some investors refrained from making large bets before Friday’s job creation report from the Labor Department.

A barrel of light crude for April delivery settled at $53.57, up 52 cents on the New York Mercantile Exchange. Crude futures rose as high as $55.20 in intra-day trading — a new four-month high.

“Energy prices, in my opinion, aren’t moving on fundamentals, they’re being driven by speculators,” said Michael Sheldon, chief market strategist at Spencer Clarke LLC. “In this environment, it’s difficult to predict the direction of the market.”

The Dow Jones industrial average spent the day wavering in and out of positive ground, reacting to oil prices, and finished up 21.06 points, or 0.2 percent, while the broader Standard & Poor’s 500-stock index closed up 0.39 point, or basically flat. But the Nasdaq composite index fell 9.10 points, or 0.4 percent.

Some of the pressure on the tech-heavy Nasdaq composite, which has lagged the other indexes since the first of the year, came from the volatile chip sector. The Philadelphia Semiconductor Index, which was down 1.27 percent for the session, has either fallen or advanced at least 1 percent each of the last five sessions, reflecting a great deal of uncertainty among tech investors.

Meanwhile, a favorable revision on worker productivity eased inflation worries and helped bonds rally briefly, though the soaring cost of oil tempered the gains. The yield on the 10-year Treasury note was steady at 4.38 percent, the dollar was mixed against other major currencies and gold fell.

The productivity of U.S. workers rose at a better-than-expected annual rate of 2.1 percent during the fourth quarter of last year, according to revised figures from the Labor Department. That’s sharply higher than an initial reading of just 0.8 percent, a sluggish number that had raised worries about inflation. Higher productivity allows businesses to pay workers more for their increased output without having to raise the price of their products.

In a separate report, the department said first-time claims for unemployment benefits dipped by 1,000 last week to a seasonally adjusted 310,000. It’s the fourth decline in jobless claims in the past five weeks, and takes the four-week moving average to its lowest level since the week of Oct. 28, 2000.

“All of this data has been generally good, but to me, you still need a better catalyst to break out of this range, something to indicate a more measured increase in interest rates,” said Russ Koesterich, U.S. equity strategist at State Street Corp. in Boston. “Stocks don’t do well in a rising rate environment. So until there’s some indication that this is a benign rate environment, you’re going to be skittish.”

Investors were also reassured by robust retail sales, which showed consumers shopping enthusiastically in February. Among the companies that beat Wall Street sales forecasts were Wal-Mart Stores Inc., whose shares gained 91 cents to $52.86; Target Corp., which had its shares climb 63 cents to $52.50; and Talbots Inc., up 8 percent, or $2.36, at $31.73. Sales at Limited Brands Inc. disappointed the market however, and its shares slid 37 cents to $24.11.

ChevronTexaco Corp. was down 38 cents at $61.19 on a Wall Street Journal report that it is considering a bid for smaller rival Unocal Corp. Unocal surged 12.3 percent, or $6.60, to $60.10.

Overseas, Japan’s Nikkei stock average added 0.4 percent. In Europe, France’s CAC-40 shed 0.03 percent, Britain’s FTSE 100 rose 0.4 percent and Germany’s DAX index lost 0.5 percent.

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