Jittery ahead of jobs report

NEW YORK (CNNMoney.com) -- Stocks erased morning gains, turning mixed early Wednesday afternoon as investors eyed seesawing oil prices and geared up for Friday's big monthly jobs report.

The Dow Jones industrial average (up 6.09 to 12,315.34, Charts) added a few points roughly 2-1/2 hours into the session. Earlier, the blue-chip average had topped its record closing high from November and flirted with a new record trading high before backing off.

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The broader S&P 500 (up 0.15 to 1,413.05, Charts) index was little changed, after briefly topping a six-year high hit earlier in the week.

The tech-fueled Nasdaq (down 4.69 to 2,441.17, Charts) composite lost 0.3 percent, giving back early morning gains.

The three major gauges had risen across the board in the morning as investors attempted to crawl back after Wednesday's modest selloff. However, any advance was limited by concerns about the November jobs report, due Friday.

A private employment services firm released a report Wednesday that suggested stronger-than-expected payroll growth in November, and Thursday's weekly survey showed a bigger-than-expected drop in new claims for unemployment.

All of which suggests Friday's report could show that employers added more than the 105,000 jobs to their payrolls than economists surveyed by Briefing.com are currently expecting, on average.

A number that is just slightly better than estimates might reassure investors concerned about the economic slowdown. However, a payrolls number substantially above forecasts could raise worries about wage inflation, something the Federal Reserve Board has said it is monitoring.

The Fed meets next Tuesday for its last monetary-policy meeting of the year and is widely expected to leave a key short-term interest rate unchanged for the fourth time in a row. The Fed funds rate currently stands at 5.25 percent, after the central bank boosted rates 17 straight times over a two-year period.

On Thursday, the European Central Bank (ECB) boosted its benchmark lending rate by a quarter-percentage point to 3.50 percent, as expected. However, the bank implied it might not raise rates again at its next meeting and also lowered its 2007 forecast on inflation, due to lower oil prices.

In corporate news, Home Depot (down $0.42 to $39.50, Charts) has said that a review showed it had unrecorded expenses of about $200 million connected to stock options, but that fixing the problem would have little effect on its finances.

Home Depot, a Dow stock, is one of many companies facing probes into the potential manipulation of stock option grants.

General Motors (down $0.28 to $29.09, Charts) said late Wednesday that its market share has bottomed out and that it sees crossover vehicles as the means of driving market share gains in the future.

Among technology decliners, Oracle (down $0.37 to $17.51, Charts) slipped for a second session after Lehman Bros. said Wednesday that investors should sell the stock ahead of the company's quarterly earnings report.

Cree (down $2.57 to $18.54, Charts) slumped 13 percent on the Nasdaq after the chipmaker warned that fiscal second-quarter revenue would miss estimates due to weaker-than-expected orders for its chips used in mobile phones.

Other chipmakers slipped too, including Altera (down $0.30 to $19.91, Charts), Micron Technology (down $0.23 to $14.61, Charts) and National Semiconductor (down $0.33 to $24.47, Charts) - which reports quarterly earnings later today.

Other tech sliders included Dell (down $0.15 to $26.43, Charts), eBay (down $0.48 to $31.68, Charts) and Apple Computer (down $1.39 to $88.44, Charts).

A variety of homebuilders slumped after rising for the last few sessions. Decliners included Lennar (down $1.09 to $53.08, Charts), D.R. Horton (down $0.66 to $26.87, Charts) and Toll Brothers (down $1.16 to $31.85, Charts).

Oil service stocks dipped, including Valero Energy (down $0.09 to $56.19, Charts), Sunoco (down $0.30 to $68.13, Charts) and Dow component Exxon Mobil (down $0.73 to $75.58, Charts).

Among other movers, Vanda Pharmaceuticals (up $10.40 to $25.90, Charts) jumped 68 percent in unusually active Nasdaq trade after its experimental schizophrenia drug was effective in a late-stage trial.

Market breadth was negative. On the New York Stock Exchange, decliners beat advancers 8 to 7 on volume of 600 million shares. On the Nasdaq, losers topped decliners eight to five on volume of 900 million shares.

U.S. light crude oil prices for January delivery added 11 cents to $62.30 a barrel on the New York Mercantile Exchange.

COMEX gold fell $4.80 to $631.10 an ounce.

Treasury prices inched higher, lowering the yield on the benchmark 10-year note to 4.47 percent from 4.48 percent late Wednesday. Bond prices and yields move in opposite directions.

In currency trading, the dollar fell versus the yen. The greenback was little changed versus the euro on the ECB news.

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