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Wall Street advances as oil prices pull back

Stocks reversed their morning losses and moved higher Monday in light trading, finishing the day up modestly, as technology stocks gained and crude-oil reached a low for the session.
/ Source: The Associated Press

Stocks reversed their morning losses and moved higher Monday in light trading, finishing the day up modestly, as technology stocks gained and crude-oil reached a low for the session.

Wall Street crept forward as oil prices wilted from last week’s record highs, falling more than $1 a barrel in mid-afternoon trading. A barrel of light crude settled at $66.28, down 59 cents on the New York Mercantile Exchange.

Technology was one of the stock market’s strongest sectors. Agilent Technologies Inc. rose $3.92 to $30.33 after it said it will sell its chip unit to two buyout firms for $2.66 billion. Apple Computer Inc., Texas Instruments Inc. and Qualcomm Inc. also boosted the sector.

Volume was light. After the market seesawed last week to the barest of gains, the August doldrums descended on Wall Street Monday. With earnings season winding down and no dramatic economic releases for the day, traders had little to motivate them.

“As long as the price of oil remains above $65 a barrel, investors are going to be very guarded and volume low,” said Hugh Johnson, chairman and chief investment officer of Johnson Illington Advisors. “The other potentially exciting event is housing prices ... Sales of new homes will be watched very carefully for any signal that the housing bubble is breaking.”

Monthly data on existing home sales is due next Tuesday and data on new home sales is due next Wednesday.

After spending most of the morning in negative ground, the Dow Jones industrial average perked up in afternoon trading and finished the day up 34.07 points, or 0.3 percent, while the broader Standard & Poor’s 500-stock index added 3.48 points, or 0.3 percent. The Nasdaq composite index, full of technology stocks, gained 10.14 points, or 0.5 percent.

Fundamentally, the market is still on solid footing, “but of course, somewhere along the line, crude prices at these levels will weigh on economic activity if they don’t come down within a reasonable time,” said Peter Cardillo, chief strategist, senior vice president and market analyst, S.W. Bach & Co.

In company news, Agilent, which makes electronic test and measurement products, said it plans to use proceeds from the sale of its chip unit and other assets for a $4 billion share repurchase program.

Apple rose $1.58 to $47.68 after Piper Jaffray named it as top large-capitalization pick for the rest of 2005. Texas Instruments rose 41 cents to $32.20 and Qualcomm rose 67 cents to $41.46.

Earnings at Lowe’s Cos. Inc., the nation’s second-largest home improvement retailer, were 20 percent higher than a year ago. Lowe’s shares rose 70 cents to $65.89 after the company’s second-quarter profit surpassed Wall Street’s forecast by 3 cents per share and the company said its third-quarter earnings would be higher than analysts’ current estimates.

Time Warner Inc. rose 26 cents to $18.50 after financier Carl Icahn disclosed that he and a group of investors bought $2.2 billion shares of the company and will press it to shed its cable TV unit and embark on an aggressive buyback of $20 billion of its own shares.

Icahn, known for taking stakes in companies and agitating for strategic changes, said he and several other investors have amassed more than 120 million shares, or about 2.6 percent, of the media conglomerate.

British Airways PLC rose 44 cents to $53.11 after it resumed all scheduled domestic and European flights Monday and said fewer than 200 passengers remained stranded after last week’s ground-crew walkout disrupted the travel plans of some 100,000 fliers. The airline said it was operating 95 percent of long-distance flights Monday.

Overseas, Japan’s Nikkei stock average fell 0.04 percent. In Europe, Britain’s FTSE 100 lost 0.03 percent, Germany’s DAX index fell 0.3 percent and France’s CAC-40 was down 0.2 percent.