NEW YORK (AP):

Wall Street extended its advance Monday as the price of crude oil fell briefly below US$113 a barrel, easing investors' concerns about the impact of inflation on the American economy.

Light, sweet crude fell US$1.88 to US$113.32 per barrel on the New York Mercantile Exchange after dipping as low as US$112.83, oil's lowest level since early May. Oil traders appeared to set aside uneasiness about fighting between Russia and Georgia that had raised the possibility of supply disruptions in the region. They focused instead on a report from China that its crude oil imports fell significantly in July.

Oil down

The drop in oil prices, which have fallen more than US$30 from their July 11 high of US$147.27, has alleviated Wall Street's concerns about inflation and its impact on spending by consumers and businesses.

Jim Hardesty, president of Hardesty Capital Management in Baltimore, said the two biggest pressures on the market - a financial sector struggling with souring debt and high oil prices - are both showing signs of moderation.

"We have a speculative bubble in prices that's giving way to what now I think are more moderate levels," he said, referring to oil's surge higher this year. "I think we look forward to a resumption of an improvement in equity prices based on still-good earnings coming out of many companies."

Stocks up

In midday trading, the Dow Jones industrial average rose 86.95, or 0.74 per cent, to 11,821.27, after the blue chips' 300-point jump Friday.

Broader stock indicators also advanced. The Standard & Poor's 500 index rose 13.29, or 1.03 per cent, to 1,309.61, and the Nasdaq composite index rose 36.44, or 1.51 per cent, to 2,450.54.

Advancing issues outnumbered decliners by about three to two on the New York Stock Exchange, where volume came to a light 418.7 million shares. Light trading can exacerbate the market's moves.