NEW YORK, March 5 (UPI) -- U.S. stock market rallies faded Wednesday as oil prices surged on news that supplies in the United States diminished by 3.1 million barrels last week.

Ambac Financial Group (NYSE:ABK)'s offer to put $1 billion worth of stock in investors' hands also diminished the rally.

"People are looking around saying, how are they going to sell all this stock?" portfolio manager Michael A. Church told The Wall Street Journal.

At the close, the Dow Jones industrial average was down 15.14 points to 12,198.66, off 0.01 percent.

The Standard & Poor's 500 index gained 7.03 points to 1,333,78 points, up 0.53 percent. The Nasdaq composite index also rose, up 12.53 points to 2,272.81, up 0.55 percent.

On the New York Stock Exchange 1,870 stocks advanced and 1,263 declined on a volume of 4.173 billion shared traded.

The 10-year U.S. Treasury note declined 19/32 to yield 3.702 percent.

The euro traded at $1.5265 Wednesday from $1.5203 Tuesday, while the dollar traded at 103.957 Wednesday from 103.16 yen Tuesday.

In Tokyo, the Nikkei index closed 20.22 points down, off 0.02 percent at 12,972.06 points.

In London, the FTSE 100 index gained 85.80 points, up 1.49 percent to 5,853.50 points.

Britain to close Sharia-based tax loophole

LONDON, March 5 (UPI) -- Britain's Chancellor Alistair Darling plans to close an Islamic loophole that permitted developers to avoid $1.99 billion in taxes, it was reported Wednesday.

The loophole was created in 2005 to allow homeowners compliant with Islamic law to avoid having to pay their stamp duty twice, the Times of London reported.

Under Islamic law, called Sharia, no interest payments are allowed. Consequently, for Sharia compliant mortgages, banks would set themselves up as the owner of the property, while homeowners, essentially, leased the home until they could buy the property at a pre-arranged price.

In Britain, leases require a stamp duty tax, too, so to avoid paying the tax twice, Sharia-friendly tax laws were adopted.

But developers with no cultural ties to Islam spotted the loophole and customized their deals accordingly.

An increasing number of $100 million to $200 million deals have been arranged using Sharia-compliant financing, analysts said.

"There has definitely been over a billion pounds' worth of deals -- it is only worth doing on the larger deals. There is nothing illegal but it has only become fashionable over the past six months," one property agent said.

Gazprom and Ukraine settle gas dispute

MOSCOW, March 5 (UPI) -- Russia's natural gas giant Gazprom resumed full supplies to Ukraine Wednesday after two days of cutbacks resulting from an unpaid bill.

Ukraine's gas company Naftogaz threatened Tuesday to curtail supplies to Europe in the wake of Gazprom's two cutbacks of 25 percent of Ukraine's natural gas supply announced Monday and Tuesday.

The dispute over Ukraine's $600 million outstanding bill was resolved over the phone, Itar-Tass reported.

"Gazprom has resumed gas supplies. I believe that supplies will reach full capacity by tomorrow, as some time is needed for the gas transportation system to resume its normal regime," a Naftogaz spokesman said.

The spokesman said Gazprom Chief Executive Officer Alexei Miller and Naftogaz chief Oleh Dubina agreed gas supplied from Jan. 1 to March 1 would be paid for under previous agreements, the report said.

Ukrainian President Viktor Yushchenko said Wednesday that supplies to Europe would not be reduced.

Yahoo! could delay meeting, analysts say

SUNNYVALE, Calif., March 5 (UPI) -- Yahoo! Inc. (NASDAQ:YHOO) may use a stall tactic to avoid being gobbled up by Microsoft Corp. (NASDAQ:MSFT), analysts said Wednesday.

Microsoft offered $44.6 billion to purchase Yahoo! on Feb. 1, an offer that now stands at $41.2 billion, The New York Times (NYSE:NYT) reported.

Yahoo! quickly rejected the offer, which put Microsoft in the position having to woo shareholders and attempt to install new board members at Yahoo!'s annual meeting.

According to Delaware law -- where Yahoo! is incorporated -- the company must hold an annual meeting at least every 13 months. The company's last annual meeting was June 12, 2007.

"The most likely scenario probably is that Yahoo! is trying to buy more time," Carl Tobias, a University of Richmond law professor told the newspaper.

Yahoo! could delay the meeting for a month to give executives time to pursue other deals. Currently, Yahoo! is negotiating with AOL, a subsidiary of Time Warner (NYSE:TWX), on a possible merger.

But, a delayed annual meeting could open Yahoo! up to lawsuits from either Microsoft or shareholders frustrated that Yahoo! has not accepted Microsoft's bid.