* Oil prices hit 2016 highs
* Railroad operators CSX, Norfolk, Union Pacific gain
* AbbVie drops on downgrade, biggest drag on S&P
* Indexes up: Dow 0.25 pct, S&P 0.22 pct, Nasdaq 0.21 pct (Updates to early afternoon)
By Yashaswini Swamynathan
June 8 (Reuters) - Wall Street was higher in a narrow trading range early on Wednesday afternoon, with the S&P 500 inching towards its all-time high, as oil prices hit 2016 highs above $50 a barrel.
A weaker dollar helped boost oil, copper and gold prices, while aluminum climbed to the highest levels in nearly a month.
Oil prices were up for a third consecutive day, also helped by supply outages. They had earlier pared gains after U.S. data showed a surprise build in gasoline supplies.
Commodity-sensitive industrial and materials stocks benefited.
Investors have all but priced out an interest rate hike when Federal Reserve officials meet on June 14-15, which pushed the dollar lower for the fourth day in a row.
Despite surprisingly weak monthly jobs data last Friday, Fed Chair Janet Yellen boosted sentiment Monday by painting a mostly upbeat picture of the economy.
“I think the good news for the market is that the sentiment is still far from euphoric,” said Marc Pouey, U.S. equity and quantitative strategist at Bank of America in New York.
“So if you have data just chug along and no major shocks, you could potentially have the market gap higher.”
At 12:41 p.m. ET (1641 GMT) the Dow Jones industrial average was up 45.41 points, or 0.25 percent, at 17,983.69.
The S&P 500 was up 4.65 points, or 0.22 percent, at 2,116.78, after rising within 14 points of its record high it touched in May 2015.
The Nasdaq Composite was up 10.58 points, or 0.21 percent, at 4,972.33.
Eight of the 10 major S&P sectors were higher, led by the industrials index’s 0.64 percent rise.
Railroad operators CSX, Norfolk Southern and Union Pacific were all up about 2.3 percent.
Higher gold prices helped boost miners. Freeport rose 3.5 percent and Newmont gained 3.8 percent.
AbbVie fell 1.9 percent to $61.85, and was the biggest drag on the S&P, after Morgan Stanley downgraded the stock.
Advancing issues outnumbered decliners on the NYSE by 1,933 to 1,005. On the Nasdaq, 1,774 issues rose and 940 fell.
The S&P 500 index showed 40 new 52-week highs and no new lows, while the Nasdaq recorded 88 new highs and 19 new lows. (Reporting by Yashaswini Swamynathan and Tanya Agrawal in Bengaluru; Editing by Savio D’Souza)