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Bargain-hunting lifts stocks a bit

NEW YORK - Wall Street began the third quarter with a modest gain yesterday after a mix of news made it clear the country was still deep in economic trouble, but may have some positive trends - including some better-than-expected sales for General Motors Corp.

NEW YORK - Wall Street began the third quarter with a modest gain yesterday after a mix of news made it clear the country was still deep in economic trouble, but may have some positive trends - including some better-than-expected sales for General Motors Corp.

Prices rose early in the session, then turned sharply lower for much of the day before recovering in late afternoon. The uneven performance was not surprising - some bargain-hunting was to be expected after a dismal first half and, in particular, a dismal June.

The session brought more discouraging news for investors: Oil rose again toward record high levels, a report showed that U.S. manufacturers were still under duress, and Ford Motor Co. said its June sales tumbled.

Yet GM's sales, while falling 18.2 percent last month, came in above analysts' forecasts, retaining Detroit's lead over Toyota Motor Corp. and sending the automaker's shares higher. GM's news was in sharp contrast to the dismal results reported earlier by Ford Motor Co., where a 27.9 percent plunge in sales for the month sent the company's stock to its lowest point in decades.

And while the Institute for Supply Management had an overall disappointing report on manufacturing in June, it also reported strong exports for U.S. factories.

The Dow Jones industrial average, down more than 150 points earlier, rose 32.25, or 0.28 percent, to 11,382.26, while the Standard & Poor's 500 index rose 4.91, or 0.38 percent, to 1,284.91. The Nasdaq composite gained 11.99, or 0.52 percent, to 2,304.97.

Oil settled at a record high of $140.97 a barrel on the New York Mercantile Exchange after rising above $143 a barrel as worries about tight supply and mounting tensions in the Middle East continued.

The market may also have gotten a technical kick upward, when the S&P 500 fell to 1,260.68, its lowest point since July 2006. When the index, the one most closely followed by market professionals, falls to a target level set by traders, buyers tend to come back to stocks.

Investors might get some more direction in economic reports like tomorrow's June employment numbers.

Ford fell 10 cents to close at $4.71, and hit a multiyear low of $4.41 during the session, after the automaker reported that sales declined a weaker-than-expected 28 percent in June. However, GM rose 25 cents to close at $11.75 after it reported sales rose well above expectations.

Lehman Bros. Holdings Inc. shares rose $1.15, or 5.81 percent, to $20.96 after a steep decline Monday. The nation's fourth-largest investment bank had been the target of rumors that it might sell itself to Britain's Barclays P.L.C. at a discount price.

The Russell 2000 index of smaller companies added 1.93, or 0.28 percent, to 691.59.