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 <.VIX>, 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 <.DJI> was down 19.72 points, or 0.16 percent, at 12,086.06. The Standard & Poor's 500 Index <.SPX> added 0.65 point, or 0.05 percent, at 1,306.75. The Nasdaq Composite Index <.IXIC> 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)