Stock indexes swung between gains and losses in afternoon trading Wednesday as the price of oil rose above $100 a barrel for the first time since July.
The jump in the price of crude could weaken the already U.S. fragile economy by raising costs for gasoline, heating oil and airline fuel. Oil futures jumped 3 percent to $102 a barrel as U.S. supplies dropped and a new pipeline deal by a Canadian company threatened to cut them even more.
Several oil companies rose sharply in afternoon trading, limiting the market's overall losses. Halliburton Co. rose 3.3 percent and Baker Hughes Inc. jumped 5.3 percent.
The Dow Jones industrial average was down 5 points to 12,090 as of 2:30 p.m. Eastern time. The average fell nearly 125 points shortly after the opening bell and slowly recovered throughout the day. Gains by energy giants Exxon Mobil Corp. and Chevron Corp. pulled the Dow closer to breakeven.
The S&P 500 fell 1 point to 1,256. The Nasdaq composite lost 4, or 0.2 percent, to 2,682.
U.S. economic reports were mixed. Output at the nation's factories, utilities and mines rose at the fastest pace in three months in October, the Federal Reserve said. Production of autos and parts surged 3.1 percent.
Consumer prices largely held steady last month. The Consumer Price Index dropped 0.1 percent in October, led by a steep decline in gas prices. An index of builder sentiment rose to the highest level since May 2010, but is still well below a level consistent with a strong housing market.
Concerns about Europe's debt crisis continued to linger. The European Union economy grew at an annual rate of just 0.2 percent between July and September, a sign that Europe may be headed for a recession. Together, the 27 countries in the European Union make up the world's largest economy and a key source of revenue for companies in the Standard and Poor's 500 index.
Borrowing rates remained dangerously high for Italy and other large European countries like Spain and France, the latest signal that Europe's debt woes could be spreading from smaller countries like Greece and Portugal and into the industrial core of the region.
The yields on Italy's 7-year and 8-year government bond hit 7 percent, a level widely seen as unsustainable. Comparable rates for 10-year government bonds in Spain and France were 6.37 percent and 3.69 percent. That's far above the 1.81 percent rate that Germany, Europe's strongest economy, has to pay to borrow money in debt markets.
In corporate news, Target Corp. gained 1.2 percent after sales growth and an improvement in its credit card business helped the retailer beat Wall Street's profit estimates. Abercrombie & Fitch Co. plunged 12 percent after the company reported earnings that fell far short of Wall Street's expectations. The company said rising costs for cotton and other commodities cut into profits.
Dell Inc. dropped 1.3 percent after the company said late Tuesday that its revenues will be held back by an industry-wide shortage of hard drives.
Copyright 2011 The Associated Press.