NEW YORK | Stocks ended a back-and-forth session with a modest advance Thursday as a sharp drop in oil prices helped counter renewed concerns about the strength of the economy.
Oil fell nearly $5 per barrel after China announced plans to raise caps on gasoline and diesel fuel prices, a move that could ease global demand. The pullback in oil was welcome after weeks in which rising prices have pinned down investor sentiment with fears that the run-up would force businesses and consumers to curb spending.
But worrisome comments from Citigroup Inc. perhaps damped some investors' spirits. The bank warned that a "substantial" amount of write-downs on bad debt are still to come.The comments from Citi's chief financial officer, Gary Crittenden, sent Citigroup shares lower and at times weighed on the financial sector. Citi was among the steepest decliners of the 30 stocks that make up the Dow Jones industrial average.
But while Citi's comments about faltering debt renewed worries about credit markets, the drop in oil seemed to encourage some investors to buying stocks.
"It really seems to be a tug-of-war between the good news and the bad news, or the not-as-bad news and the terrible news," said Jennifer Ellison, principal with wealth management firm Bingham, Osborn & Scarborough in San Francisco. "I think it's going to be hard for the market to find a trend when there is still this undercurrent of bad economic data and negativity in the financial sector and the high price of oil."
According to preliminary calculations, the Dow rose 34.03, or 0.28 percent, to 12,063.09. The Dow traded below the 12,000 mark in Wednesday's session for the first time since mid-March and sank below it again in trading Thursday. But some investors appeared encouraged that the blue chips closed above that level both Wednesday and Thursday.
Broader stock measures also advanced. The Standard & Poor's 500 index rose 5.02, or 0.38 percent, to 1,342.83, and the Nasdaq composite index jumped 32.36, or 1.33 percent, to 2,462.07.
Advancing issues narrowly outpaced decliners on the New York Stock Exchange, where volume came to 1.29 billion shares compared with 1.28 billion shares traded Wednesday.
Crude oil futures fell $4.75 to settle at $131.93 per barrel on the New York Mercantile Exchange after China disclosed plans to raise prices for gasoline and diesel fuel by 16 percent and 18 percent, respectively. The move could dampen demand.
Bond prices fell as stocks fluctuated. The yield on the benchmark 10-year Treasury note, which moves opposite its price, rose to 4.22 percent from 4.14 percent late Wednesday.
The dollar traded mixed against other major currencies, while gold prices rose.
Citigroup fell 23 cents to $20.17 after the company's comments about the likelihood of further write-offs of bad debt.
Circuit City Stores Inc. posted a first-quarter loss that was wider than last year's due to sinking sales at established stores. The electronics retailer also said it is suspending its dividend. The company's per-share loss was slightly smaller than analysts expected, but its revenue was lower. Circuit City fell 7 cents to $3.98.
Hexion Specialty Chemicals Inc. said it doesn't think it will be able to acquire fellow chemicals maker Huntsman Corp. because of the deterioration of Huntsman's finances. Huntsman fell $8, or 38 percent, to $12.86.
The Russell 2000 index of smaller companies rose 7.12, or 0.97 percent, to 737.83.
Overseas, Japan's Nikkei stock average sank 2.23 percent. Britain's FTSE 100 fell 0.84 percent, Germany's DAX index slipped 0.12 percent, and France's CAC-40 fell 0.59 percent.
