Dow Posts Small Gain as Market Awaits News

Blue-chip stocks edged up Wednesday as crude oil prices fell from record levels, but the Nasdaq eased slightly a day after closing at a four-year high.

Wall Street pros said the markets appeared to be treading water, with the Labor Department’s July job report due Friday and the Federal Reserve’s next decision on interest rates due Tuesday.

“I think this market is just going to have to grind higher, little by little, and probably sell off a little here and there, at least until the Fed meeting,” said Scott Wren, equity strategist for A.G. Edwards & Sons.

Disappointing earnings from Time Warner pressured stocks, but investors were relieved by a drop in oil futures, coming as the government’s latest petroleum inventory report showed a slight rise in crude stockpiles. After reaching a new intraday high of $62.50 early in the session, a barrel of light crude settled at $60.86, down $1.03, in New York trading.

The S&P; 500 gained 0.92 point, or 0.1%, to 1,245.04, its best close since June 12, 2001.

Other stock indicators were narrowly mixed. The Dow Jones industrial average rose 13.85 points, or 0.1%, to 10,697.59, while the Nasdaq composite lost 1.34 points, or 0.1%, to 2,216.81.

Losers outnumbered winners by about 7 to 6 on the Big Board.

Bond prices rose as the Treasury announced the return of the 30-year bond in 2006, to be issued after a four-year hiatus, and as the government said it would sell a smaller-than-expected $44 billion in three-, five- and 10-year notes next week. The benchmark 10-year T-note yield fell to 4.29% from 4.34% on Tuesday.

Some stock investors were disappointed in the latest reading of the Institute for Supply Management’s services index. The ISM index, which measures growth in the service sector of the economy, fell to 60.5 in July, lower than the 61 reading expected by economists and down from 62.2 in June.

Even as oil prices fell, some analysts worried that the bullish earnings season -- more than two-thirds of companies have exceeded Wall Street’s profit forecasts -- was masking the effects that high energy prices could have on third- and fourth-quarter earnings.

“This market has reacted to earnings news without thinking about the effects that $60-a-barrel oil could have on the third and fourth quarters and beyond,” said Brian Bruce, director of global investments at PanAgora Asset Management in Boston. “The good news from companies still continues to create a halo effect around stocks, but if $60 is the new equilibrium for oil prices, that’ll create a problem down the road.”

In other market highlights:

* Microsoft rose 44 cents to $27.25 on speculation that the world’s largest software maker would announce another large increase in its annual dividend. Microsoft’s gain limited the Nasdaq’s decline.

* Oracle, also one of Nasdaq’s weightiest components, fell 20 cents to $13.38 on speculation that the software company might raise its bid to secure a controlling stake in Indian banking software firm I-Flex Solutions.

* Shares of Time Warner dropped 15 cents to $17.27 after the media giant posted weaker-than-expected earnings.

* Pinnacle Entertainment soared $2.74 to $24.10 after the casino operator reported stronger-than-forecast profit.

* Delta Air Lines shares reached their lowest level in at least 43 years amid concerns that the carrier was closer to filing for bankruptcy. The stock touched $2.12 before closing at $2.32, down 21 cents. The company declined to comment.