Stocks edge higher as investors watch oil retreat

The retailers' sales data still suggested, however, that high energy costs are leading consumers to alter their spending. Wal-Mart Stores Inc., said sales of groceries, flat-screen TVs and medications helped boost sales last month at stores open for at least a year by 3.2 percent. But some apparel stores, whose merchandise falls into the category of discretionary items, continue to see depressed sales, with consumers budgeting more for gasoline and food.

The retail sales readings come a day after soaring oil prices knocked the Dow Jones industrial average down more than 200 points. After hitting a record of nearly $124 late Wednesday in electronic trading, crude dipped 98 cents to $122.55 a barrel on the New York Mercantile Exchange.

Another factor weighing on consumers has been the job market -the United States has seen four straight months of net jobs losses. In a positive sign, the Labor Department said Thursday the number of newly laid off workers seeking unemployment benefits dropped by 18,000 last week to 365,000, a larger decline than expected.

But so far, there has been no definitive data to show the economy is rebounding -and that sort of data is not likely to arrive until the fall, said Janna Sampson, director of portfolio management at Oakbrook Investments.

Mixed economic readings and lofty energy prices could keep the market in a holding pattern through the summer, Sampson said. "With oil high and continuing to go up, it's going to be tough to get the market to have a sustainable rally."

The Dow rose 32.89, or 0.26 percent, to 12,847.24.

Broader stock indicators turned higher after fluctuating in early trading. The Standard & Poor's 500 index rose 0.88, or 0.06 percent, to 1,393.45, and the Nasdaq composite index rose 7.52, or 0.31 percent, to 2,446.01.

Bond prices rose. The yield on the benchmark 10-year Treasury note, which moves opposite its price, fell to 3.82 percent from 3.85 percent late Wednesday.

Wal-Mart shares inched up 18 cents to $57.01, but Target Corp. fell $1.71, or 3.2 percent, to $51.74 after saying its same-store sales increased in April by an amount that was smaller than analysts forecasted.

Retailers' figures came in following worrisome results from Toyota Motor Corp., which said late Wednesday that profit in the January-to-March period tumbled 28 percent due to the rising yen and weak North American sales. The Japanese automaker also predicted sales will drop for the fiscal year through March 2009 for the first time in several years, and profit will fall 27 percent.

Toyota's U.S.-traded shares fell $4.72, or 4.5 percent, to $100.04.

In other earnings news, American International Group is scheduled to release its first-quarter results after the close of trading. Analysts expect the insurer to post a loss. AIG shares fell 61 cents to $44.47 ahead of the report.

Gold prices rose, while the dollar climbed against most other major global currencies.

The European Central Bank left its interest rates unchanged Thursday. ECB President Jean-Claude Trichet pointed to clear upside risks to price stability, indicating that the bank is unlikely to lower its rates in the near future.

The Russell 2000 index fell 1.13, or 0.16 percent, to 715.08.

Declining issues narrowly outnumbered advancers on the New York Stock Exchange, where volume came to 352.7 million shares.

In overseas trading, Japan's stock market fell 1.13 percent. By afternoon in Europe, Britain's FTSE index fell 0.21 percent, Germany's DAX index fell 0.61 percent, and France's CAC-40 fell 0.54 percent.

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