Lower oil prices weigh on market

NEW YORK - Investors seem to be fearing that they may have bet too soon on an economic comeback.

Stocks ended mostly lower yesterday, as drops in prices for oil and other commodities led investors to worry that demand for basic materials may remain slack. The major market indexes closed mixed but off their lows for the day.

The drop in oil to a five-week low pushed energy and commodities stocks lower and sent investors into havens such as consumer-goods producers. Occidental Petroleum slid 2.5 percent while Procter & Gamble Co., which makes Tide and Crest, rose 2.1 percent.

Back-and-forth trading yesterday followed conflicting signs about the economy. Oil skidded on fears of weak demand, while a trade group's report found that activity in the services industry rose in June to its best level in nine months.

The Dow Jones industrial average rose 44.13, or 0.5 percent, to 8,324.87, and the broader Standard & Poor's 500 index rose 2.30, or 0.3 percent, to 898.72. The technology-heavy Nasdaq composite index fell 9.12, or 0.5 percent, to 1,787.40.

Oil fell $2.68 to settle at $64.05 per barrel on the New York Mercantile Exchange. Last week, oil hit an eight-month high above $73.

In economic news, the Institute for Supply Management's services index rose to 47 in June from 44 in May, beating the expectation of 45.5 from economists polled by Thomson Reuters.

The stock market has relatively few guideposts this week before second-quarter earnings reports, which get under way tomorrow with Dow component Alcoa Inc. but don't pick up speed until next week.

Sound results at a Treasury Department auction of $8 billion in 10-year Treasury Inflation-Protected Securities (TIPS) helped reassure investors that the government would be able to finance its spending plans to help revive the economy.

An analyst upgraded his rating on American Express Co., saying that the credit-card company would be among the least affected by regulatory changes and that worries about bad debt are easing. The stock rose $1.25, or 5.6 percent, to $23.52.

The drop in commodities hit companies like Exxon Mobil Corp., which fell 39 cents, or 0.6 percent, to $68.10, and Occidental, down $1.58, or 2.5 percent, at $61.70.

Alcoa fell 60 cents, or 6.1 percent, to $9.26, while Freeport-McMoRan Copper & Gold Inc. fell $3.78, or 7.6 percent, to $45.94.

Among consumer staples companies, P&G rose $1.06, or 2.1 percent, to $52.17.