Wall Street mixed after sell-off as oil weighs

NEW YORK (Reuters) - Stocks were mixed on Thursday after a two-day sell-off as oil prices rallied on the revolt in Libya, raising fears of inflation and stagnant global growth.

The CBOE Volatility Index , Wall Street's so-called fear gauge, fell 3.5 percent to 21.36, reversing course for the first time in two days. The index has an inverse correlation to the S&P 500, indicating stocks could rise.

Brent crude oil futures advanced 2.1 percent to $113.53 a barrel on mounting concerns that the revolt in Libya could spread to other major energy producers.

Despite some market gains, investors were not convinced stocks could rally again.

"It's a little early to say we are coming out of (a correction). The market was set up to sell off and the geopolitical issue was a good excuse," said Benny Lorenzo, chief executive at Kaufman Bros., a New York-based investment bank.

The Dow Jones industrial average was down 19.72 points, or 0.16 percent, at 12,086.06. The Standard & Poor's 500 Index added 0.65 point, or 0.05 percent, at 1,306.75. The Nasdaq Composite Index was up 14.32 points, or 0.53 percent, at 2,737.31.

Priceline.com Inc supported the Nasdaq, jumping 8.4 percent to $462.02 after a number of brokerages raised their price targets on the stock. The online travel agency reported a larger-than-expected profit late Wednesday.

General Motors Co's earnings topped estimates but the stock was down nearly 5 percent at $32.90.

U.S. economic reports were mixed. While weekly U.S. jobless claims fell more than expected, orders for a range of manufactured goods recorded their largest decline in two years in January.

Also, new home sales fell more than forecast in January, pulled down by a drop in activity in the western United States.

(Reporting by Angela Moon; editing by Jeffrey Benkoe)