Wall Street struggled to hold on to tiny gains made during a short-lived respite to rising oil prices, with retailers leading the pack.
The market picked up after oil prices dipped on forecasts that tropical storm Katrina will skirt around oil rigs in the Gulf of Mexico.
The news helped to stall the a record-setting rally in oil prices but late buying of oil pushed crude up 17 cents to a finishing price of $67.49 a barrel.
At the close the Dow Jones Industrial Average was up 0.2 per cent 10,450.63. The S&P 500 also gained 0.2 per cent at 1,212.40, while the Nasdaq Composite rose 0.3 per cent up at 2,134.37.
The temporary fall in oil prompted a stir among big chains such as Best Buy and Lowe’s. Best Buy, the country’s biggest electronics retailer, gained 2.9 per cent to $46.75 while Lowe’s, a home improvement store, climbed 2.1 per cent to $64.19.
Philip Roth, strategist at Miller Tabak, said energy prices would continue to concern investors for the foreseeable future.
“For the first time we are beginning to see a divergence between rising oil prices and oil stocks,” Mr Roth said.
“We have already seen consumer cyclicals being clobbered but the message of this might be that we have reached a point where expensive oil is actually hurting oil stocks.”
The day’s star turn was York International, a heating equipment and air conditioner maker, which found itself the subject of a takeover offer from Johnson Controls, an auto parts supplier. York soared 36 per cent to $56.79. Other ventilation companies climbed too, with Lennox International gaining by 5.8 per cent to $24.46 and American Standard up 2.9 per cent to $44.88.
Another dramatic upward move came courtesy of theme park operator Six Flags, which saw its share price jump 11 per cent to $7.26 after it announced it would seek outside buyers. The move came in the wake of an attempt by investor Daniel Snyder to seize control of the company.
TiVo did rather less well after the digital video recorder maker warned of “challenges” ahead and a wider quarterly loss than expected. The group, which will lose a partnership in October with DirecTV group that had provided the bulk of its subscriber growth, said it would have to increase spending to attract more customers. TiVo fell 15.4 per cent to $5.18.
The sharpest fall on the S&P 500 came from Intuit, which dropped 5.6 per cent to $43.76 after the tax preparation software maker forecast a worse-than-expected loss for the first quarter.
It was also a bad session for Ford and GM both of which had their debt ratings cut to junk status by Moody’s after the market closed on Wednesday. GM fell 0.5 per cent to $34.09 and Ford slipped 1 per cent to $9.82.
Get alerts on Front page when a new story is published