Energy Stocks Up in Mixed Trading

Stocks were mixed Monday as rising oil prices helped lift energy shares but weighed on the broad market.

Crude futures gained $1.35 to $68.74 a barrel in New York trading on supply concerns related to tensions over Iran’s nuclear ambitions. An index of oil producers’ shares rose 1.4%.

The return of oil prices to levels not seen since Hurricane Katrina is a troubling sign for some market watchers.

“I think one of the conundrums the market faces is that we continue to see energy prices go higher,” said Art Hogan, chief market analyst for Jefferies & Co. “It’s going to be hard to get the market to rally much this week with oil starting at $68.”

But shares of big companies may get a boost from Alcoa when trading resumes today. The world’s largest aluminum producer kicked off earnings season after the bell Monday by reporting a jump in first-quarter income that beat analysts’ estimates. Alcoa shares were up about 7% in after-hours trading after rising 33 cents to $32.83 in the regular session.

A volley of strong first-quarter earnings reports could revive Wall Street’s enthusiasm because many analysts had set expectations low, said Susan Malley, chief investment officer of Malley Associates Capital Management. Dow component General Electric is also scheduled to report results this week before earnings season begins in earnest next week.

“We started the year thinking estimates were too low,” Malley said. “I think that’s going to show itself this season, and that’s a very positive thing.”

Investors will have plenty of other economic data to sift through this week, when reports on import prices, retail sales and consumer confidence are due. Analysts have said those numbers are crucial for assessing how consumers feel about the economy as interest rates and energy prices rise.

“The market will pause here” because of higher interest rates and oil, said Brian Thorkelson, an asset manager at Thrivent Financial’s Lutheran Brotherhood Mid Cap Growth Fund. “It will probably trade around these levels until we get better clarity on interest rates and better clarity on the earnings picture. Earnings will be the telltale sign.”

The market ended last week with its biggest one-day loss since Feb. 28, after a government report showed the best first quarter for hiring since 2000, rekindling concern that the Federal Reserve will raise interest rates further to curb inflation.

The Dow Jones industrial average, which fell 96.46 points Friday, rose 21.29 points, or 0.2%, to 11,141.33 on Monday.

The Standard & Poor’s 500 index gained 1.12 points, or 0.1%, to 1,296.62, and the Nasdaq composite index slipped 5.75 points, or 0.3%, to close at 2,333.27.

The Russell 2,000 small-stock index eased 0.4% to 752.95.

Losers outnumbered winners 7 to 5 on the New York Stock Exchange and by about the same margin on Nasdaq.

In other market highlights:

* Another big rally in energy shares supported the S&P; 500. Chevron rose $1.07 to $59.72, Baker Hughes jumped $3.04 to $72.54 and Anadarko Petroleum surged $4.02 to $106.17. Exxon Mobil was the Dow’s second-biggest gainer, up 61 cents to $61.94.

* In the auto sector, Ford fell 8 cents to a 52-week low of $7.52. GM lost 11 cents to $19.40.

* Gold and silver miners were mixed despite the latest jump in precious metals prices. Barrick Gold added 11 cents to $29.39 and Newmont Mining was up 16 cents to $52.90, but Glamis Gold fell 32 cents to $35.16 and Agnico Eagle dropped 17 cents to $31.78.

* Wal-Mart fell after Morgan Stanley trimmed its earnings forecast for the first quarter and 2007 by a penny a share. Wal-Mart dropped 32 cents to $45.70.

* Banc of America Securities cut its price target for semiconductor equipment maker Applied Materials, whose stock fell 35 cents to $17.69. Also, brokerage UBS cut its rating on Applied and three related companies. An index of semiconductor stocks fell 0.8%.

* Boeing soared $1.22 to a record $80.79 on optimism about potential plane orders from China. The stock is up 15% this year.

Also in the aerospace sector, Raytheon fell 88 cents to $44.52. Merrill Lynch lowered its recommendation on the stock to “neutral” from “buy,” saying the shares already reflected the outlook for higher defense spending. The stock is up 11% this year.

* The yield on the 10-year Treasury note, which shot up to a four-year high of 4.98% on Friday after the government reported a strong rise in March employment, eased to 4.95%.