Stocks near flat

By Caroline Valetkevitch

NEW YORK (Reuters) - Stock indexes ended little changed on Wednesday as a rise in oil prices to a record $80 a barrel lifted energy shares, but a disappointing outlook from Texas Instruments Inc. (TXN.N) raised concerns about the technology sector's profit outlook.

Trading was light and volatile ahead of next week's Federal Reserve meeting at which policy-makers are expected to cut interest rates. Investors are betting on a deep cut in the benchmark fed funds rate, according to the futures markets, but some economists say the Fed could move more conservatively.

Energy shares extended gains in afternoon trading, driving the S&P energy index .GSPE up 0.8 percent after U.S. crude for October delivery CLc1 breached the psychologically important $80 a barrel mark for the first time.

Chip maker Texas Instruments was among the top drags on the S&P 500 index after it was less enthusiastic about revenue prospects than other technology bellwethers, which have forecast robust demand.

"I think the big issue is the debate over Federal Reserve policy, so, to some extent, the market is waiting it out," said Hugh Johnson, chief investment officer of Johnson Illington Advisors in Albany, New York. "The question has been 'Will the changing credit market condition impact the economy in a serious way?'"

The Dow Jones industrial average .DJI ended down 16.74 points, or 0.13 percent, at 13,291.65. The Standard & Poor's 500 Index .SPX was up 0.07 point at 1,471.56. The Nasdaq Composite Index .IXIC was down 5.40 points, or 0.21 percent, at 2,592.07.

After the close, McDonald's Corp. (MCD.N) raised its annual dividend by 50 percent as part of a plan to return up to $17 billion to shareholders through 2009. Its shares advanced to $52.30 in extended trade after closing at $51.20.

Also after the bell, shares of Target Corp. (TGT.N) rose 2.2 percent to $64.11 after the retailer said it is had hired an investment bank to advise it in a review of options for its credit card assets.

During the regular session, U.S. Treasury Secretary Henry Paulson said in a speech a recovery in the subprime mortgage market will be slowed by a wave of interest rate resets.

Shares of Texas Instruments fell 1.7 percent to $35.12 after it narrowed its target range for revenue in the third quarter late on Tuesday. The Philadelphia Stock Exchange index of semiconductors .SOXX was down 1.94 percent, while shares of International Business Machines (IBM.N) declined 1.15 percent to $116.

U.S. front-month oil prices gained $1.68, or 2.15 percent, to settle at $79.91 a barrel after earlier hitting $80.18 as government data showed U.S. crude inventories fell much more than expected last week, stoking concerns about supplies.

Exxon Mobil Corp (XOM.N) advanced 0.8 percent to $87.65 and was among stocks giving the biggest lift to the S&P.

Meanwhile, shares of fuel-hungry airline stocks fell. The American Stock Exchange airline index .XAL was down 2.8 percent. Shares of US Airways Group Inc (LCC.N) were the biggest decliner, shedding 4 percent to end at $29.89.

Some big manufacturers declined as well with oil's jump. Alcoa Inc. (AA.N) was down 1.6 percent at $33.65.

Among gainers, Apple Inc. (AAPL.O) shares rose 1 percent to $136.85 after UBS lifted its price target on the stock to $182 from $175 on expectations many more products could be introduced between now and March 2008.