Wall Street gave up a substantial early gain and staggered to a mixed finish today after a Federal Reserve official warned that interest rates might continue to climb.

A disappointing sales forecast from Wal-Mart Stores Inc. sent stocks mostly lower today as investors worried that oil prices, which stabilised after last week’s highs, would curb consumer spending and hurt companies’ third-quarter earnings.

A drop in oil prices and upbeat outlooks from Wal-Mart and Lowe’s prompted some bargain-hunting on Wall Street, sending stocks sharply higher today, with the swing exaggerated by thin late summer trading. The Dow Jones industrials surged nearly 130 points higher.

Wall Street, already beset by worries about the economy and world events, skidded even lower today on news that the head of Iraq’s governing council had been assassinated. The Dow fell more than 100 points.