U.S. Stocks Open Up; Gains Tempered By Rise In Oil Prices

NEW YORK (MarketWatch) -- U.S. stocks pulled mildly higher Wednesday ahead of a key manufacturing gauge that could bolster the case for another interest-rate cut by the Federal Reserve, but surging oil prices limited the upside.

The Dow Jones Industrial Average gained 4.1 points to 13,268.9, with 19 of its 30 components ahead.

Shares of Citigroup Inc. gained 0.3% after a Punk, Ziegel & Co. analyst advised clients to buy its stock.

The S&P 500 rose 1.42 points to 1,469.78 and Nasdaq Composite added 6.07 points to 2,658.35.

Tempering investor optimism was an early spike in crude oil that had futures rising above $98 a barrel, fueling concern about energy prices. Crude futures more recently were up $2.08 at $98.06. .

Gold futures also climbed, with the contract for February delivery ahead $10.40 to $848.40. .

Shares of Amazon.com Inc. climbed 4.7% after Citigroup raised its recommendation on the Web retailer from hold to buy.

On Monday, stocks fell amid worries about economic growth, with the Dow industrials losing 101 points, the Nasdaq Composite shedding 22 points and the S&P 500 losing 10 points.

At 10 a.m. Eastern, the Institute of Supply Management is slated to release its manufacturing index for December, with economists looking for the gauge to hold just above 50%, an indication of an expansion in economic activity.

The afternoon will bring minutes from the Fed's Dec. 11 meeting, at which the central bank lowered interest rates by a quarter-point to 4.25%.

Overseas stock markets were mixed, with the Hang Seng down 0.9% in Hong Kong and the FTSE 100 up 0.6% in London.

The dollar slipped against both the euro and the yen.

The credit crunch continued to take its toll, with PHH Corp. , a Mount Laurel, N.J., provider of residential-mortgage and vehicle-fleet-management services, saying it has called off its plan to be acquired by General Electric Co.'s GE Capital financing unit, for $1.69 billion, or $31.50 a share.

PHH is seeking $50 million from Blackstone Group , as the deal had called for Blackstone to acquire PHH's mortgage business from GE Capital, but the New York-based group failed to secure financing.

In the tech sector, Advanced Micro Devices was downgraded to sell at Banc of America Securities on worries about its position in servers as well as growing costs.

And Qualcomm said a judge ruled that it violated certain Broadcom patents and ordered it to stop making and selling certain cell-phone chips.

By Kate Gibson