Wall Street higher as oil prices tumble

Wall Street rose cautiously Tuesday as investors weighed the potential impact of lower oil prices on the broader market, and remained cautious about corporate earnings after Sprint Nextel Corp. issued a profit warning.

Wall Street has lost some of its recent ebullience as earnings season approaches, and will get its first glimpse of corporate health when Alcoa Inc. reports after the closing bell. Investors have been monitoring profit warnings to gauge how hundreds of companies might fare as they report through the course of the month.

Sprint Nextel said it expects 2007 profit and revenue to come in below analysts' projections, and that it would cut staff to help save costs. The telecommunications company is the latest addition to a list of a half-dozen other companies that warned on Monday.

Investors also wrestled with the positive and negative effects of a continued slide in oil prices. Warm weather in the Northeast has weakened demand for energy, and drove a barrel of oil to below $54 per share in early trading.

But major oil and gasoline companies _ many of which are components of the Standard & Poor's 500 and Dow Jones industrials _ were among the session's weakest performers. Lower oil prices make it likely that Exxon Mobil Corp., BP PLC and others will see lower profits this year.

In late morning trading, the Dow rose 19.63, or 0.16 percent, to 12,433.12.

Broader stock indicators advanced. The S&P 500 index was up 1.16, or 0.08 percent, at 1,414.00, and the Nasdaq composite index added 7.13, or 0.29 percent, to 2,445.33.

Bonds held steady, with the yield on the benchmark 10-year Treasury note slightly higher to 4.66 percent from 4.65 percent late Monday. Trading in the fixed-income markets is expected to remain light with no major economic news or speeches by Federal Reserve officials expected.

The dollar was mixed against other major currencies, while gold prices were lower.

The slide in oil prices added support to some stocks, especially sectors like transports and retailers who stand to benefit from lower gasoline prices. A barrel of light sweet crude fell $1.62 to $54.44 on the New York Mercantile Exchange.

Dow component Exxon Mobil fell 33 cents to $72.34. BP dropped $2.13, or 3.3 percent, to $62.19 after it announced a lower output and narrowing margins. Chevron Corp. fell 69 cents to $70.76.

Conversely, Wal-Mart Stores Inc. was one of the biggest boosts to the S&P 500 as lower fuel prices could give consumers more spending power, and would lower costs to ship its products. Shares of the world's largest retailer rose 61 cents to $47.59.

Wall Street is watching to see if companies like Alcoa can continue an 18-quarter advance of double-digit profit gains for S&P 500 companies. For the broader market, Thomson Financial said double-digit gains have spanned 14 quarters.

Alcoa, the world's biggest aluminum producer, was seen as a litmus test for the health of U.S. manufacturing since its products are used by broad spectrum of companies. The Pittsburgh-based company is expected to report earnings of 65 cents per share on sales of $7.63 billion, according to Thomson Financial. Shares were unchanged at $28.48.

Investors got a reminder of the fragility of corporate profits after Sprint Nextel warned 2007 will miss expectations. The wireless company was also the target of several analyst downgrades, causing shares to drop $1.83, or 9.3 percent, to $17.81.

Technology stocks were among the biggest drivers in the session with news coming from the annual Macworld Expo in San Francisco and Consumer Electronics Show in Las Vegas get under way.

Apple Computer Inc. shares rose $1.95, or 2.3 percent, to $87.43 on expectations Chief Executive Steve Jobs might announce the company's first mobile phones.

Wall Street also watched as moves by Venezuelan President Hugo Chavez moved to nationalize its largest telecommunications firm, CANTV. The company, which is the only Venezuelan stock trade on the NYSE, fell $3.84, or 22.8 percent, to $13.

Verizon Communications Inc., which has a 25 percent stake in the Venezuelan company, rose 26 cents to $37.07.

Advancers outnumbered decliner by 3 to 2 on the New York Stock Exchange, where volume came to 535.9 million shares.

The Russell 2000 index of smaller companies fell 1.81, or 0.23 percent, at 775.18.

Overseas, Japan's Nikkei stock average closed up 0.86 percent after being closed Monday due to a public holiday. In afternoon trading, Britain's FTSE 100 was up 0.01 percent, Germany's DAX index rose 0.39 percent, and France's CAC-40 added 0.32 percent.

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