* French banks plan for Greek euro-zone exit -sources
* U.S. consumer sentiment in May at highest since October
* Dow off 0.3 pct, S&P off 0.02 pct, Nasdaq down 0.1 pct
By Ryan Vlastelica
NEW YORK, May 25 U.S. stocks were little changed
on Friday as investors held off on making large bets ahead of a
three-day weekend as uncertainty continued to swirl over Europe.
Warnings about Greece kept investors cautious, as did new
developments with Spain after Standard & Poor's downgraded five
banks and a source told Reuters that Bankia asked for
$24 billion in state aid. However, a bullish read on U.S.
consumer sentiment kept pessimism in check.
Industrial and energy shares were the day's weakest, while
defensive sectors performed the best. Boeing Co and
Chevron Corp were the biggest decliners on the Dow,
followed by Caterpillar Inc. All fell more than 1
percent in the thinly traded session.
"The market is drifting and cautious ahead of the holiday.
There's no consistency, though we do seem to be digging in after
some bad weeks," said Donald Selkin, chief market strategist at
National Securities in New York, which has about $3 billion in
assets under management.
"Still we have the overhang of Europe and just have to hope
things don't get worse over there."
Belgium's Deputy Prime Minister Didier Reynders issued a
warning over Greece, saying it would be a "grave professional
error" if central banks and companies were not preparing for a
Greek exit from the euro zone.
French banks, which are among the lenders most exposed to
Greece, have stepped up their efforts on contingency plans for
the debt-laden country leaving the euro zone, sources familiar
with the situation said.
The Dow Jones industrial average was down 44.73
points, or 0.36 percent, at 12,485.02. The Standard & Poor's 500
Index was down 0.25 points, or 0.02 percent, at 1,320.43.
The Nasdaq Composite Index was up 3.36 points, or 0.12
percent, at 2,842.74.
The S&P is up 2 percent this week, on track to break a
three-week string of losses with its best weekly performance
since mid-March. The Dow is up 1 percent while the Nasdaq is up
2.3 percent. Trading has been choppy all week, with stocks
usually opening lower or flat, only to add gains heading into
Even with the S&P 500's 5.3 percent drop since the end of
April, U.S. stocks have held up relatively well as bear markets
rage in Brazil, Russia, peripheral Europe, and many core
European equity markets have give up all their gains for the
year. The S&P 500 is still up 5.1 percent for the year to date.
The S&P 500's top gainer was telecom services - a sign that
investors were looking for safety in defensive U.S. sectors,
possibly as money returns from riskier emerging markets and
Europe. The S&P telecoms index rose 0.5 percent.
At the end of last week, the S&P 500 tested support at the
1,290 mark and has inched away from that level during the week.
Some analysts are expecting the benchmark index to test its
200-day moving average at 1,281 and possibly fall below that.
Chesapeake Energy Corp gained 2.4 percent to $15.95,
up for the second day after the company announced it has put a
half-million acres in Wyoming and Colorado up for sale.
Data showed Thomson Reuters/University of Michigan Surveys
of Consumers' final May consumer sentiment index rose to 79.3
from 77.8 in the preliminary May report. It was the highest
level since October 2007. Market reaction was muted.
In the aftermath of last Friday's botched initial public
offering of Facebook, lead underwriter Morgan Stanley
will adjust thousands of trades to ensure outstanding
limit orders to sell will be filled at no more than $42.99 a
share, the firm told its brokers on Thursday, according to
several who listened to the call.
Facebook's stock lost 3.8 percent to $31.78, close to its
all-time intraday low of $30.94.