Stocks struggle for direction at midday

NEW YORK (CNNMoney.com) -- Stocks wavered in midday trade Tuesday, as Wall Street juggled record-high oil prices and material sector strength with residual credit market fears.

The Dow Jones industrials average (Charts) edged lower two hours into the session.

The broader S&P 500 index (Charts) inched higher, while the tech-laden Nasdaq (Charts) fell 0.3 percent.

Investors, which have grown accustomed lately to a daily delivery of bad news from the big Wall Street banks, got a reprieve Tuesday but worried that more bad news from the banks and brokerages could be on the horizon.

Just a day earlier, Citigroup's (Charts, Fortune 500) warning that it might suffer up to $11 billion more in mortgage-related losses weighed on the financial sector and sent major gauges lower.

Instead, sky-high commodity prices became the focus for Wall Street.

Oil prices jumped more than $2 a barrel to a new record trading high of $97 a barrel. Light, sweet crude for December gained $2.20 to $96.60 a barrel on the New York Mercantile Exchange.

Gold prices continued to trade at levels not seen since 1980, as COMEX gold for December added $12.70 to $823.50 an ounce.

That lifted shares of mining giants such as BHP Billiton (Charts) and leading gold producer Barrick Gold Corporation (Charts). The AMEX Gold Bugs Index (Charts) was over 3 percent higher in midday trade.

"There's not any bad news floating around today as far as the subprime issue goes," said Paul Nolte, director of investments at Hinsdale Associates. "But look at the oil and metals sector they are absolutely flying and that is giving some support to averages."

With no major economic reports on tap, investors were also closely focused on earnings news.

Sun Microsystems (Charts, Fortune 500) returned to a profit that matched Wall Street forecasts when it reported results late Monday. But revenue fell a bit short of estimates, sending shares down over 7 percent on the Nasdaq.

Energy firm Valero (Charts, Fortune 500) said Tuesday its quarterly results fell more than 20 percent, hurt by weak refining margins, but still managed to stay ahead of Wall Street forecasts.

Agricultural giant Archer Daniels Midland (Charts, Fortune 500) reported better-than-expected earnings before the opening bell, sending its shares nearly 8 percent higher on the New York Stock Exchange.

Overseas, shares of the Chinese online commerce company Alibaba.com nearly tripled in their debut Tuesday. Web search giant Yahoo (Charts, Fortune 500) holds a 39 percent stake in Alibaba's parent company, Alibaba Group.

Markets in Asia finished mixed Tuesday, while major indexes in Europe were modestly higher in afternoon trade. The dollar hit yet another record low versus the euro but edged higher versus the yen.

Treasury prices fell, lifting the yield on the benchmark 10-year note to 4.37 percent, down from 4.30 percent late Monday. Bond prices and yields move in opposite directions.

The dollar retreated to a new record low against the euro and retreated against the yen.