Greenspan Giveth, Oil Taketh Away

Updated from 4:48 p.m. EDT

The old trader's maxim dictates "the trend is your friend." That was certainly the case for oil on Wednesday when crude hit a fresh four-month high even as the Department of Energy reported greater-than-expected supplies piling up and a decline in refinery activity. The oil surge helped wipe out a morning rally for stocks.

Crude rose almost 3% on the day as futures on the New York Mercantile Exchange closed above $53 a barrel for the first time since October. The Dow Jones Industrial Average hit an intraday high of 10,869.83 but finished down 18 points, or 0.2%, at 10,811.97. The S&P 500 was virtually unchanged at 1210.08 vs. its intraday high of 1215.58 and the Nasdaq Composite fell 0.2% to 2067.50 after trading as high as 2084.15.

Oil wasn't the market's only challenge. Federal Reserve Chairman Alan Greenspan trooped up to a House Budget Committee hearing. Fears that the maestro might send a signal of more interest rate hikes than expected had stocks and bonds edgy at the open. ...