Stocks flat as Alcoa, Exxon rise; Nasdaq falls
NEW YORK (Reuters) - The Dow and the S&P 500 ended little changed on Monday as soaring commodity prices
lifted Alcoa and Exxon Mobil, offsetting fears of more fallout from the housing slump, while the Nasdaq fell after brokers cut their price targets on Apple.
The surge in the prices of gold, oil, platinum and silver prompted investors to buy the shares of natural resources companies, including Alcoa Inc (AA.N), which ended up 3.2 percent at $38.32, and Exxon Mobil Corp (XOM.N), up nearly 1 percent at $87.75.
But financial shares took a beating after Thornburg Mortgage Inc <TMA.N, a high-profile mortgage lender, said it does not have enough cash to meet its creditors' demands, driving its stock down 51.5 percent to $4.32 on concerns it might file for bankruptcy. The lender's woes troubled investors since it specializes in jumbo mortgages considered among the less risky home loans.
Souring profit expectations also hurt bank shares, pulling Citigroup Inc (C.N) down 2.6 percent and Bank of America Corp (BAC.N) down 1.4 percent. An Oppenheimer and Co. analyst cut earnings-per-share estimates on three U.S. brokers.
Apple Inc (AAPL.O) dropped 2.6 percent to $121.73, weighing on the Nasdaq, after RBC Capital Markets and Banc of America Securities cut their price targets on the stock of the iPhone and iPod maker.
"There's not a single stitch of good news out there," said Peter Kenny, managing director at Knight Equity Markets in Jersey City, New Jersey.
The Dow Jones industrial average .DJI ended down 7.49 points, or 0.06 percent, at 12,258.90. The Standard & Poor's 500 Index .SPX rose 0.71 of a point, or 0.05 percent, to close at 1,331.34. The Nasdaq Composite Index .IXIC slipped 12.88 points, or 0.57 percent, to finish at 2,258.60.
Boeing Co (BA.N) was the biggest drag on the Dow after the
defense contractor and plane maker lost a multibillion-dollar U.S. Air Force contract to competitors. For details, see ID:nN29239552 Boeing shares fell 2.6 percent to $80.67 on the New York Stock Exchange.
After the closing bell, shares of Barnes & Noble (BKS.N) dropped 5 percent to $26.90 after the top U.S. bookseller said 2008 could be "an especially challenging retail year."
OIL, GOLD AND INFLATION FEARS
The jump in commodity prices "speaks to the likelihood of inflation rearing its ugly head in the second half of this year, just when everyone is expecting the market to work its way through the subprime crisis," Kenny said. "There's the prospect of stagflation."
U.S. oil futures for April delivery settled at $102.45 per barrel, up 61 cents, after earlier climbing to an intraday record at $103.95. U.S. gold for April delivery hit an intraday record at $992 an ounce, inching closer to the $1,000 mark.
Billionaire investor Warren Buffett's comments that a recession was already under way also rattled investors, and contributed to declines among other economically sensitive sectors, including the shares of home builders. Continued...
