updated 9/29/2005 7:08:18 AM ET 2005-09-29T11:08:18

Stocks finished a volatile session mostly higher Wednesday, as investors welcomed new government data showing a reinvigorated industrial sector but wrestled with a jump in oil prices that briefly sent crude futures above $67 per barrel.

Major Market Indices

Crude oil futures surged after the Energy Department reported a larger-than-expected drawdown in the nation’s crude oil reserves, although the report also showed a surprise surplus in gasoline inventories.

The report cost the market early gains that were spurred by the Commerce Department’s bullish report on durable goods , big-ticket manufactured items made to last at least three years. Durable goods orders shot up 3.3 percent in August after falling 5.3 percent in July. Economists expected minimal gains.

Despite the losses, analysts remained impressed with stocks’ resilience in the face of continuing uncertainty over energy prices, a slowdown in consumer spending and ever-higher interest rates.

“There are still some significant headwinds out there, but I have to say, the market has held up pretty well,” said Russ Koesterich, senior 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.”

The Dow Jones industrial average was up 16.88 points, or 0.2 percent, at the close, while the broader Standard & Poor’s 500-stock index was higher by 1.23 points, or 0.1 percent. The Nasdaq composite index, full of tech stocks, lost 1.02 points, or 0.1 percent.

While the market has been tracking closely to fluctuation in oil prices, the long-term effects of higher energy costs have yet to cycle through much of the economy, and could come as investors hope for their annual “Santa Claus” rally in November and December. But if high gasoline and heating costs erode holiday spending, that rally could be in jeopardy.

“I look around, and I’m thinking, give me a rationale why I should own stocks right here,” said Jay Suskind, head trader at Ryan Beck & Co. “Clearly you can pick stocks, pick sectors, find ways to make money. And the economy has shown amazing resiliency. But in the aggregate, that rationale is getting tougher to find.”

In corporate news, embattled auto maker General Motors Corp. rose 7 cents to $30.84 after reaching a tentative contract deal with the Canadian Auto Workers and avoiding a strike just one hour before workers were to walk off the job.

DaimlerChrysler AG said it plans to cut 8,500 jobs in its Mercedes division , not the 5,000 originally reported, in a bid to return to profitability. DaimlerChrysler jumped $2 to $54.83.

Eastman Kodak Co. fell 12 cents to $24.89 after the company said its revenues from digital products would exceed expectations for the year, but that operating profit would come in below the company’s earlier targets due to a sluggish economy and high employee health care costs.

Spice maker McCormick & Co. saw a modest rise in quarterly profits on improved sales, beating Wall Street profit forecasts by a penny per share. McCormick rose $1 to $32.

Overseas, Japan’s Nikkei stock average rose 0.95 percent. In Europe, Britain’s FTSE 100 closed up 0.87 percent, France’s CAC-40 climbed 1.16 percent for the session, and Germany’s DAX index surged 1.67 percent.

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