Dow inches up as GMAC and oil help

NEW YORK (Reuters) - The Dow clung to a small gain at midday on Friday, supported by an advance in General Motors shares after its GMAC affiliate qualified to be a bank holding company, while higher oil prices lifted energy stocks.

But the S&P 500 and Nasdaq dipped in thin trade as a drop in semiconductors' stocks offset gains among retailers like Amazon.com . An index of semiconductor stocks <.SOXX> lost almost 1 percent.

The Federal Reserve paved the way for GMAC LLC, the financing arm of automaker General Motors Corp , to become a bank holding company on Wednesday, giving it access to government lending programs to help stave off bankruptcy.

The Fed's move to make GMAC eligible for aid under the government's $700 billion bailout fund removed some uncertainty and eased investors' concerns.

"It helps in that we don't have deal with another big uncertainty right now, but I don't think we can all make comments that it's a positive for the market," said Tim Smalls, head of U.S. stock trading at Execution LLC in Greenwich, Connecticut.

"Do you think government intervention is ever a big positive?" Smalls asked.

Shares of GM, a Dow component, rose 13.5 percent to $3.69. Rival Ford Motor Co stock gained 9 percent to $2.30.

The Dow Jones industrial average <.DJI> added 10.43 points or 0.12 percent, to 8,478.67. But the Standard & Poor's 500 Index <.SPX> dipped 1.10 points, or 0.13 percent, to 867.05. And the Nasdaq Composite Index <.IXIC> slipped 5.42 points, or 0.35 percent, to 1,519.52.

U.S. oil futures rose above $37 a barrel on Friday after the United Arab Emirates joined leading exporter Saudi Arabia in deepening supply curbs in line with OPEC's announcement last week of its biggest-ever output cut.

Exxon Mobil topped the Dow as U.S. crude oil futures climbed as much as 5.4 percent and hit a session high at $37.27 a barrel.Exxon's stock advanced 1.5 percent to $76.95, while Chevron Corp shares gained 0.5 percent to $69.98. The S&P index of energy stocks <.GSPE> rose 1 percent.

On the Nasdaq, shares of computer graphics company Nvidia Corp fell 4.3 percent to $7.39.

Google Inc slipped 1.2 percent to $299.20, making it the top drag on the Nasdaq.

Amazon's stock rose 0.7 percent to $51.78 and helped limit the Nasdaq's decline after the Internet retailer said it had its best holiday shopping season ever.

Jones Apparel was another bright spot in the retail sector. Its stock surged 36.3 percent to $5.30 on the NYSE after the company said it had reduced its $1.25 billion in lines of credit into a single line of $600 million.

Still the S&P 500 index of retailers <.RLX> slipped 0.3 percent after a report showed U.S. sales fell as much as 4 percent during one of the worst holiday shopping climates in modern times.

The report from SpendingPulse, a division of MasterCard Advisors, said sales were down 2 percent to 4 percent from a year ago for the full holiday season and declined 8 percent in December alone.

(Additional reporting by Charles Mikolajczak; Editing by Jan Paschal)