Stocks flat as investors continue to watch oil

NEW YORK (CNNMoney) -- U.S. stocks closed little changed Wednesday in what was mostly a quiet session, as investors closely tracked developments in Libya and oil prices.

The Dow Jones industrial average (INDU) lost 1 point to close at 12,213.

IBM (IBM, Fortune 500) was the best performer among the blue chips. IBM's shares climbed more than 2% after Deutsche Bank analysts upgraded their price target on Big Blue to $200 a share and maintained a "buy" rating on the stock

The S&P 500 (SPX) fell 1.8 points, or 0.1%, to 1,320. The Nasdaq (COMP) composite lost 14 points, or 0.5%, to 2,752.

Investors had little market-moving data to work with Wednesday, with no major economic reports and no companies releasing quarterly results.

Oil remained the dominant issue for investors. Crude prices have been surging for weeks, and there's been little on the domestic front to help give stocks a sustained boost.

Oil posted modest losses on Wednesday, falling 85 cents, or less than one percent, to $104.16 a barrel.

"The story is higher oil, and it will remain so as long as oil remains higher than it has been in recent years," said Frank Davis, director of sales and trading with LEK Securities.

Investors said there's a reasonable chance prices could continue to rise in the near-term as unrest and violence continue to rattle North Africa and the Middle East. But they also think oil will ease as the year goes on once the fears subside.

"This $105 oil is not demand-driven as the global economy is still struggling," said Keith Goddard, president and portfolio manager at Capital Advisors. "Oil's fluctuations are all fear-based at the moment -- we can wake up one morning and Libya's fine, or we can wake up another day and Libya's in focus again."

"Investors are slowly starting to reposition portfolios for the possibility that these prices may stay around for awhile," Davis said.

U.S. stocks closed broadly higher Tuesday, led by a strong performance in the financial sector. Bank of America (BAC, Fortune 500) CEO Brian Moynihan issued a rosy multi-year outlook at the bank's first shareholder meeting in four years.

Companies: The biggest loser on the S&P 500 was JDS Uniphase (JDSU), with shares of the optical networking equipment maker plunging 17%. The entire sector got hammered after rival Finisar (FNSR) issued a weak outlook Tuesday, citing weak demand out of China. Shares of Finisar sank 39% Wednesday.

After the close, Hot Topic (HOTT) and Coldwater Creek (CWTR) release quarterly results.

Economy: The Commerce Department said wholesale inventories rose 1.1% in January, slightly better than the 1% rise economists had expected, according to a consensus estimate from Briefing.com.

World markets: European stocks closed lower. Britain's FTSE 100 slid 0.6%, the DAX in Germany lost 0.5%, and France's CAC 40 lost 0.6%.

The yield on Portuguese bonds jumped as the European nation issued two-year bonds on Tuesday, but fears of a potential bailout didn't have much impact on international markets.

Asian markets ended with gains. The Shanghai Composite rose nearly 0.1%, the Hang Seng in Hong Kong added 0.4%, and Japan's Nikkei advanced 0.6%.

Currencies and commodities: The dollar slipped versus the euro and the British pound but was flat against the Japanese yen.

Gold futures for April delivery closed up $2.40 to $1,429.60 an ounce.

Bonds: The price on the benchmark 10-year U.S. Treasury rose, with the yield slipping to 3.54% from 3.54% late Tuesday.