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Thursday, March 3, 2011

US Stocks: $102 oil has investors on edge (ext)

NEW YORK (CNNMoney) -- U.S. stocks ended slightly higher Wednesday, as nervous investors focus on oil prices, which rose above $102 a barrel on renewed concerns about oil and the Libyan conflict.

The Dow Jones industrial average (INDU) rose 9 points, or 0.1%. The S&P 500 (SPX) added 2 points, or 0.2%, and the Nasdaq (COMP) gained 11 points, or 0.4%.

U.S. stocks sank Tuesday, with all three major indexes falling more than 1%, as oil prices spiked almost 3%.

"We're seeing a bit of a recovery in the market from yesterday, but we're still in a tug of war period," said Karl Mills, president and chief investment officer at Jurika Mills & Keifer. "The swing factor is what's happening with the price of oil."

"The key is to watch how far and how quickly oil prices rise," Mills said. "The economy can handle where oil is now, but nobody sees the geopolitical uncertainties going away, and higher oil prices could curb economic growth here and in Europe."

Gold futures for April delivery also rose, as investors made a play for safety. The yellow metal touched an intraday all-time high of $1,441 an ounce, before easing slightly to settle at a fresh record of $1,437.70 an ounce.

In the Federal Reserve's Beige Book report, a reading of the economic situation from the regional Fed banks, the central bank said manufacturers and retailers across all 12 of the Fed's districts are passing on rising commodity prices to consumers, but the economy continues to grow at a moderate pace.

The dollar fell against the euro and the British pound but rose versus the Japanese yen.

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