Published: May 12, 2008 10:20 am         

Stocks fluctuate as oil falls, dollar advances

NEW YORK — Wall Street fluctuated in a narrow range Monday, giving up a modest early advance as oil prices ticked lower and the dollar rose.

The market’s concerns about rising inflation and its effect on consumer spending receded somewhat as light, sweet crude fell 65 cents to $125.31 per barrel on the New York Mercantile Exchange. Oil prices surged nearly $10 last week, touching off concerns about rising prices and their effect on businesses and consumers.

The dollar’s gains also appeared to help ease some concerns about inflation. A weak dollar can exacerbate price increases, especially since hard commodities like oil become more attractive to investors seeking a hedge against inflation.

The market also got some encouraging news about the credit crisis from London-based HSBC Holdings PLC, which said its first-quarter profits were up from a year ago although the global banking company took a $3.2 billion write-down on subprime mortgage assets in the United States. The company did echo other assessments that the U.S. was likely to fall into recession this year.

Still, the day’s news wasn’t enough of an incentive for anxious investors to do much buying. The major indexes all fell last week as worries about the impact of inflation eroded some of the market’s recent optimism, and investors remained cautious while they waited for more data about the economy’s direction.

In the first hour of trading, the Dow Jones industrial average rose 13.84, or 0.11 percent, to 12,759.72.

Broader stock indicators were mixed. The Standard & Poor’s 500 index slipped 0.94, or 0.07 percent, to 1,387.34, and the Nasdaq composite index rose 2.18, or 0.09 percent, to 2,447.70.

Bond prices rose. The yield on the benchmark 10-year Treasury note, which moves opposite its price, fell to 3.76 percent from 3.78 percent late Friday. The dollar was higher against most other major currencies, while gold prices fell.

In corporate news, FedEx Corp. fell $1.10 to $89.27 after lowering its fiscal fourth-quarter earnings forecast, citing rising fuel costs.

MBIA Inc. posted a $2.41 billion first-quarter loss, as the struggling bond insurer took heavy charges to write down the value of liabilities amid continued deterioration in the credit markets. The stock rose 57 cents, or 6.2 percent, to $10.

Investors will be looking to other readings on consumers this week to determine the toll rising energy costs might be having. Government figures are due on retail sales in April. And retailers including Wal-Mart Stores Inc., Macy’s Inc., JCPenney Co. and Kohls Corp. are due to report first-quarter results.

Advancing issues outnumbered decliners by about 5 to 4 on the New York Stock Exchange, where volume came to 151.8 million shares.

The Russell 2000 index of smaller companies rose 0.50, or 0.07 percent, to 720.56.

Overseas, Japan’s Nikkei stock average rose 0.64 percent. In afternoon trading, Britain’s FTSE 100 was up 0.30 percent, Germany’s DAX index rose 0.51 percent, and France’s CAC-40 rose 0.15 percent.