Early Wall Street rally stalls as markets eye oil prices

NEW YORK - US stocks traded mixed Tuesday after an early rally effort stalled amid weakness in the chip sector and Wall Street kept a wary eye on oil prices.
The Dow Jones Industrial Average climbed 28.74 points (0.27 percent) to 10,833.25 while the Nasdaq composite fell a fractional 0.89 point (0.04 percent) to 2,050.15 at 1600 GMT.
The broad-market Standard and Poor's 500 index drifted up 2.56 points (0.21 percent) to 1,209.39.
The market opened on an upbeat note after news that US retail sales increased 0.5 percent in February, led by purchases of electronics, clothing, gas and food outside the home.
Meanwhile the New York Federal Reserve was the first of two Fed banks to provide an early look at March factory output. Its Empire State Index showed manufacturing activity in the New York region expanded slightly in March. The index edged up to 19.6 from 19.2 in February.
"Retail sales were a bit of a disappointment but if you take in the revisions, they were more or less in line," said Peter Cardillo, chief market analyst at SW Bach.
Pressure on the dollar eased after figures from the US Treasury showed that foreign capital flows were up sharply in January as overseas investors bought more stocks, and central banks increased their purchases of Treasury bonds and notes.
Foreign long-term net capital flows into the US rose to 91.5 billion dollars in January from a revised 60.7 billion in December. The long-term capital flow figure is the highest since May 2003 and the second-highest on record.
But the gains were pared after oil prices turned higher. Futures on the New York Mercantile Exchange rose briefly above 55 dollars a barrel, up 15 cents to 55.10 dollars as traders staked out positions ahead of the Organization of Petroleum Exporting Countries' meeting in Iran.
Among active shares, American International Group tumbled 2.16 or 3.4 percent to 61.69 after a downgrade from ratings agency Fitch in the wake of Maurice "Hank" Greenberg's departure from the insurance titan.
Lehman Brothers rallied 2.48 to 95.80 after the brokerage reported stronger-than-expected earnings.
Chip stocks were under pressure after Merrill Lynch said it expects the Philadelphia Semiconductor Index, which tracks the sector, to stay range-bound for the rest of the year.
"We expect more of the same for the remainder of the year," the analysts said.
Intel fell 14 cents to 24.13, Texas Instruments dropped 52 cents to 25.74 and Advanced Micro Devices dipped 26 cents to 16.18.
Walt Disney rose 64 cents to 28.66 as investors continued to digest news of the appointment of Robert Iger as the new chief executive.
Bonds drifted higher, with the yield on the 10-year US Treasury bond dipping to 4.488 percent from 4.516 percent Monday and that on the 30-year bond to 4.760 percent against 4.781 percent. Bond yields and prices move in opposite directions.

03/15/2005 16:15 GMT