Stocks seeking higher ground

NEW YORK (CNNMoney.com) -- Falling energy prices and a rally in tech boosted stocks Tuesday morning, but gains were limited by weakness in oil stocks and a run up in Treasury yields.

The Nasdaq (up 8.30 to 2,446.50, Charts) composite rose 0.2 percent about 90 minutes into the session. The Dow Jones industrial average (up 25.56 to 12,449.05, Charts) and the S&P 500 (up 1.64 to 1,414.48, Charts) index were little changed.

Stocks managed small gains Monday, thanks to lower oil prices, a number of mergers and some bullish analyst comments on the tech sector.

But investors struggled to extend those gains into Tuesday's session.

U.S. light crude oil prices for February delivery fell $1.40 to $54.69 a barrel, after sliding to an 18-month low in the morning.

Oil prices have been tumbling for the last week in response to unusually warm Northeast weather and bets that large hedge funds are cutting their exposure to the sector.

Lower oil and gas prices mean more money for consumers to spend on other things, and lower costs for corporations.

Wal-Mart Stores (up $0.61 to $47.61, Charts) and other retailers rose in response, with the S&P Retail (Charts) index up 1 percent.

Airlines, which directly benefit from lower fuel costs, rose Tuesday, with the Amex Airline (Charts) index rising more than 1 percent in the early going.

But oil services companies were under pressure, with the Amex Oil (down 17.50 to 1,116.89, Charts) index down.

A number of tech companies were in focus due to a pair of big conference happening on the west coast.

Apple Computer's annual Macworld expo in San Francisco was underway and analysts are expecting the company may announce the release of a mobile phone based on its iPod music player. A report Monday said Cingular will provide the wireless service.

Apple (up $1.98 to $87.45, Charts) shares gained 1.5 percent Tuesday ahead of a keynote speech from CEO Steve Jobs later today.

In addition, investors were attuned to news coming out of the Las Vegas-based Consumer Electronics Show, currently underway.

Among other movers, Sprint Nextel (down $1.84 to $17.80, Charts) slipped after issuing a financial outlook late Monday that disappointed investors.

The telecom said 2006 revenue will be roughly in line with previous estimates and 2007 revenue will fall in a range that sets the midpoint below analysts' forecasts. Sprint also said that it will cut about 5,000 jobs next year.

Market breadth was mixed. On the New York Stock Exchange, advancers narrowly edged decliners on volume of 430 million shares. On the Nasdaq, losers surpassed winners on volume of 490 million shares.

Treasury prices crept lower, pushing the yield on the benchmark 10-year note to 4.67 percent from around 4.65 percent late Monday. Bond prices and yields move in opposite directions.

In currency trading, the dollar rose against the yen and fell against the euro.

COMEX gold rose $1.10 to $610.50 an ounce.

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