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.

The Dow Jones U.S. Home Construction Index .DJUSHB, which includes shares of home builders such as Toll Brothers (TOL.N) and Centex Corp CTX.N, tumbled 4.8 percent.

Trading was volatile, with indexes swinging between losses and gains throughout the day.

The rally in the commodity markets prompted investors to snatch up shares of natural resources companies, which helped the S&P 500 snap a three-day losing streak.

Both the Dow and the Nasdaq marked their third straight down session.

Market breadth in regular trading was overly negative, with decliners outpacing advancers on both the NYSE and the Nasdaq. More stocks hit fresh 52-week lows than new highs, reflecting a broadly bearish tone.

On the Big Board, about eight stocks fell for every seven that rose. The ratio on the Nasdaq was more pronounced, with nine stocks falling for every five that rose.

Shares of miner Freeport McMoRan Copper & Gold Inc (FCX.N) jumped 2.6 percent to $103.45.

BAD DAY FOR BANKS

Citigroup ended at $23.09, down 2.6 percent, and Bank of America, the No. 1 U.S. bank by market value, finished at $39.18, down 1.4 percent. Both stocks weighed on the Dow industrials and the S&P 500.

Shares of Lehman Brothers LEH.N fell 4.7 percent to $48.61, while Bear Stearns BSC.N dropped 3.2 percent to $77.32. Banc of America Securities cut first-quarter profit estimates and price targets on four large U.S. investment banks, including Goldman Sachs (GS.N), citing the worsening losses in the equity markets. Goldman Sachs shares fell 2.7 percent to $165.08.

In economic news, an index of national manufacturing activity from the Institute for Supply Management fell in February, but the decline was not as steep as economists' forecasts.

QUALCOMM AND GOOGLE DROP

Qualcomm Inc (QCOM.O) lost 3 percent to $41.12 after a British court gave Nokia (NOK1V.HE), the world's top mobile phone maker, its second patent-case victory against the U.S. chip maker. Qualcomm ranked as the second-heaviest weight on the Nasdaq 100 .NDX index.

The Nasdaq also suffered as shares of Web search company Google Inc (GOOG.O) slid 3 percent to $457.02. That brought the stock close to its 52-week low set almost a year ago.

There also was disappointment about double-digit percentage declines in monthly auto sales. General Motors GM.N shares slipped 0.3 percent to $23.20 and Ford Motor Co (F.N) lost 5.4 percent to $6.18.

Volume was moderate on the NYSE, with about 1.57 billion shares changing hands, below last year's average daily volume of about 1.9 billion. On the Nasdaq, about 2.20 billion shares traded, above last year's daily average of 2.17 billion.

(Editing by Jan Paschal)