U.S. stocks advanced yesterday as a retreat in the price of oil and a rally in shares of Altria Group, parent of cigarette-maker Philip Morris, lifted the Dow Jones industrial average to its highest close in eight months.

"Fear of oil causing a recession" is "clearly going away," said Harry Flavin, who helps manage $1.5 billion as president of Austin, Calvert & Flavin in San Antonio. "We're headed higher with an absence of negatives and with reasonably good economic news."

The Dow climbed 22.98, or 0.2 percent, to 10,572.55. Altria led the benchmark's gain after analysts said three tobacco lawsuits may be resolved, clearing the way for the company's plan to split into two or three parts. Altria rose $1.28, or 2.2 percent, to $58.70.

The Standard & Poor's 500-stock index rose 1.61, or 0.1 percent, to 1183.55. The Nasdaq composite index gained 4.60, or 0.2 percent, to 2104.28.

Crude oil for December delivery fell 62 cents, to $46.22 a barrel, as the Organization of Petroleum Exporting Countries cut its estimate for growth in world demand this year and next because of the impact of high prices.

The gain in the S&P 500 was limited by shares of Medtronic, which dropped $3.67, to $48.65. The world's largest maker of devices that regulate heart rhythm said fiscal second-quarter profit was less than analysts expected.

Google fell $4.96, to $167.54. The world's most-used Internet search engine said its revenue growth rate in the third quarter may not be sustained into the fourth quarter and beyond.

Kmart declined a day after agreeing to buy Sears, Roebuck for $11 billion in the largest U.S. retail merger ever. Kmart shares dropped $5.29, to $103.71, erasing most of Wednesday's advance. Sears gained 81 cents, to $53.80.

Petsmart climbed $3.25, to $35.45. The largest U.S. retailer of pet supplies said same-store sales will increase by about 7 percent this year.

Other Indicators

* The New York Stock Exchange composite index fell 10.55, to 7002.91; the American Stock Exchange index fell 0.60, to 1365.36; and the Russell 2000 index of smaller-company stocks fell 0.91, to 622.06.

* Advancing issues narrowly outnumbered declining ones on the NYSE, where trading volume fell to 1.46 billion shares, from 1.68 billion on Wednesday. On the Nasdaq Stock Market, decliners narrowly outnumbered advancers and volume totaled 1.91 billion, down from 2.21 billion.

* The price of the Treasury's 10-year note rose $1.88 per $1,000 invested, and its yield fell to 4.11 percent, from 4.14 percent on Wednesday.

* The dollar rose against the Japanese yen and the euro. In late New York trading, a dollar bought 104.09 yen, up from 104.06 late Wednesday, and a euro bought $1.2968, down from $1.3040.

* Gold for current delivery fell to $442.60 a troy ounce, from $444.80 on Wednesday, on the New York Mercantile Exchange's Commodity Exchange.