NEW YORK, Aug 18 (AFP) - US shares struggled higher Wednesday as bargain-hunting overcame news that Google had slashed the value of its initial public offering because of weak demand.
Oil spiked at a new record high.
But a peace deal between a major Iraq conference and Shiite Muslim militia leader Moqtada Sadr soothed concerns about the outlook for oil prices and helped to reverse early losses on Wall Street.
By early afternoon, the Dow Jones index of 30 top companies was up 24.04 points, or 0.24 percent, at 9,996.87.
The broader Standard and Poor's 500 index rose 5.55 points, or 0.51 percent, to 1,087.26.
The technology-laden Nasdaq index, which awaits Google's arrival this week, gained 16.73 points, or 0.93 percent, to 1,811.98.
Shares took an early hit from the news that Google's new estimated share price range was lowered to 85 to 95 dollars, down from 108 to 135 previously.
Google also sliced the number of shares on offer to 19.6 million from 25.7 million.
The maximum the Internet giant can now rake in, excluding over-allotments, is 1.86 billion dollars, a stunning climbdown from initial expectations of 3.47 billion dollars.
"If you take Google as a barometer for the Internet then you have to re-think your estimates for folks like Yahoo," said Jefferies and Co. market strategist Art Hogan.
Yahoo shares dropped by a relatively modest 19 cents, or 0.67 percent, to 28.15 dollars.
"These companies have already proven that their business plan works and that they make a profit," Hogan said.
High oil prices, which tend to crimp economic activity, also bogged down the market.
New York's benchmark contract, light sweet crude for delivery in September, surged 60 cents to a record 47.35 dollars a barrel in the first hour after formal trade opened.
But the oil prices trimmed some of the gain later in the day, giving a boost to shares.
Bargain-hunting also helped lift the market.
Mace Blicksilver, analyst at Marblehead Asset Management, said news of the Najaf deal offered more support to share prices.
"We have had some good news out of Iraq. The radical militant agreed to the demands (of a crucial Iraqi national conference)," he said.
"We were a little soldout," Blicksilver said. But "I don't expect it to go too crazy on the upside."
Sadr had agreed to disarm and quit a holy shrine in Najaf as demanded by Iraq's key national conference, according to one of the organisers of the meeting.
"We have just received a letter from Moqtada Sadr's office in Baghdad that confirms 'in the name of God' ... Moqtada Sadr's acceptance to the conditions imposed by the conference," said Safia al-Suhair, who is also the wife of the human rights minister.
The announcement followed an ultimatum from Defence Minister Hazem al-Shaalan that Sadr's Mehdi Army surrender or be crushed in battle.