US stocks finished slightly higher on Thursday as lower crude oil prices offset the impact of China's first rate increase in nine years.
Investors sold steel and mining stocks such as Alcoa Inc on expectations that higher interest rates in China would cool the country's booming demand for commodities and natural resources.
But continued declines in crude oil prices helped the overall market recover from earlier losses. NYMEX December crude futures ended down $1.54 at $50.92 a barrel, further easing concerns about the impact that high oil prices might have on corporate margins.
The Dow Jones industrial average rose 2.51 points, or 0.03 percent, to end at 10,004.54. The Standard & Poor's 500 Index added 2.04 points, or 0.18 percent, to close at 1,127.44. The technology-laced Nasdaq Composite Index gained 5.75 points, or 0.29 percent, to end at 1,975.74.
Industrial stocks advanced as oil prices declined. General Motors Corp, the world's largest auto maker and a Dow component, climbed almost 2 percent, or 73 cents, to $38.81, while logistics-oriented companies such as FedExCorp, the world's dominant air-express shipper, rose about 1 percent, or 76 cents, to $90.55.
The gains marked a pause for breath after two days of strong rallies, boosted by a tumble in crude prices. On Monday, the Dow hit a fresh low for 2004.
Technology-related stocks showed particular strength, with the Nasdaq closing at its highest since July 2.
Part of Wall Street's script was written early Thursday when the central bank of China, the world's seventh-biggest economy, increased key lending rates in hopes it would curb the country's appetite for copper, oil and other commodities. The Morgan Stanley commodities-related equities index fell 1.66 percent to its lowest in more than a week, led lower by oil, mining and metals stocks.
Among metals and mining firms, Alcoa Inc, the world's largest aluminium producer and Dow component, was down 2.9 percent, or 96 cents, at $32.41, while Phelps Dodge Corp, the world's largest publicly traded copper producer, was down nearly 4 percent, or $3.46, at $84.69.
As the oil price slid, stocks of oil companies fell. ConocoPhillips fell more than 2 percent, or $1.94, to $82.98, while Dow component Exxon Mobil Corp slipped 34 cents, or 0.7 percent, to $48.61.
Earlier in the day, Exxon Mobil, the world's largest publicly traded oil company, reported a 56 percent jump in quarterly profit, driven by soaring oil and natural gas prices, and strong results from refining operations. Among tech stocks, network systems provider Cisco Systems Inc was up 40 cents, or 2.2 percent, at $18.95, while chipmaker Intel Corp was up 27 cents, or 1.2 percent, at $22.27.
Fund managers stocked up on technology shares before Friday, which is the year end for many mutual funds, traders said. This can generate tax-related buying or selling as well as window dressing.