Stocks mostly higher despite falling oil, mixed IMF report

— -- A late rally pushed stocks modestly higher Wednesday despite a mixed economic outlook from the International Monetary Fund and falling commodity prices.

At the close of trading, the Dow Jones industrial average was up 14.81, or 0.18%, to 8,178.41. In the broad market, the Standard & Poor's 500 index dipped 1.47, or 0.17%, to 879.56, and the Nasdaq composite index rose 1.00, or 0.6%, to 1,747.17.

Stocks rose modestly in the early going Wednesday, rebounding from a sharp sell-off the day before, but trepidation about the economy sent stocks lower for much of the day.

After sending stocks soaring this spring on the belief that the economy was turning around, investors have put their buying on hold since mid-June amid growing evidence that the economy is still strained. Investors are worried that the world economy may take longer to emerge from recession than originally hoped.

On Wednesday, the International Monetary Fund lowered its global economic forecast, further validating for investors that their hopes for a robust recovery may have been a bit premature.

The IMF said it expects the world economy to shrink 1.4% in 2009, slightly worse than its earlier estimate of 1.3%. But it boosted its estimate for global economic growth in 2010 to 2.5%, up from its April projection of 1.9%.

A recovery is on its way, analysts say, investors just need to be more realistic about its pace.

"At least for the first year of the expansion we're likely to see quite anemic growth," said Avery Shenfeld, chief economist at CIBC World Markets. "The message is to be patient. The broader rise in equities that we've seen since the spring will eventually prove to be warranted."

Meanwhile, oil prices fell again Wednesday, down $2.79, or 4.4%, to $60.14 a barrel. That's down from an eight-month high of $73 last week. Investors are interpreting falling oil prices as a sign of economic weakness as industrial and manufacturing activity remains in a slump.