* Weak outlook weighs on Intel
* Morgan Stanley up after results
* U.S. Republicans weigh short-term debt limit increase
* Dow up 0.1 pct; S&P up 0.01 pct; Nasdaq down 0.3 pct
By Caroline Valetkevitch
NEW YORK, Jan 18 U.S. stocks were little changed
on Friday as a weak outlook from tech heavyweight Intel offset a
better-than-expected quarterly profit at Morgan Stanley.
Still, the S&P 500 was on track for a third week in a row of
gains and remained near a five-year high.
Shares of Intel Corp slumped 6.7 percent to $21.17
a day after it forecast quarterly revenue below analysts'
estimates and announced plans for increased capital spending
amid slow demand for personal computers.
On a positive note, Morgan Stanley reported a
fourth-quarter profit after a year-earlier loss, helped by
higher revenue at the bank's institutional securities business.
Its stock jumped 7.5 percent to $22.32.
"Intel earnings weren't that bad, although their revenue was
weak. It sparks fears about not only the company but about the
whole PC sector, and that's pressuring the market today," said
Tim Ghriskey, chief investment officer of Solaris Group in
Bedford Hills, New York.
Heading into a three-day weekend, investors were cautious
about the chances for settling of major differences in Congress
about government debt and spending. U.S. markets will be closed
on Monday for the Martin Luther King Jr. holiday
"Governmental policy, or lack thereof, is again pushing
forth this wait-and-see attitude on the part of investors. So
the market is flat and with low volume and low volatilty because
investors are waiting to see what happens with the debt ceiling
and spending cuts," said Bryant Evans, investment adviser and
portfolio manager at Cozad Asset Management, in Champaign,
There were signs that the question of raising the U.S. debt
limit would be put off for a while. House Republican leaders
said they would seek to pass a three-month extension of federal
borrowing authority next week to buy time for the
Democratic-controlled Senate to pass a budget that shrinks
Overall, S&P 500 fourth-quarter earnings rose an estimated
2.5 percent, according to Thomson Reuters data.
The Dow Jones industrial average was up 8.69 points,
or 0.06 percent, at 13,604.71. The Standard & Poor's 500 Index
was up 0.17 points, or 0.01 percent, at 1,481.11. The
Nasdaq Composite Index was down 8.61 points, or 0.27
percent, at 3,127.39.
On Thursday, the S&P 500 rose to its highest since late 2007,
and that could prompt investors to lock in recent gains,
Reflecting the complacency, the CBOE Volatility index
, Wall Street's so-called fear gauge, fell 7.4 percent.
The VIX usually moves inversely to the S&P 500 as it is used as
a hedge tool against further market decline.
Economic data from China provided some support to the
market, though the focus remained on U.S. corporate earnings.
The country's economy grew at a modestly faster-than-expected
7.9 percent in the fourth quarter, the latest sign the world's
second-biggest economy was pulling out of a post-global
financial crisis slowdown which saw it grow in 2012 at its
weakest pace since 1999.
General Electric reported a better-than-expected rise
in earnings, spurred by robust demand in China and oil-producing
countries. Shares were up 3.2 percent at $21.99.
Despite the gains by Morgan Stanley, financial stocks sagged
as Capital One Financial reported disappointing profit.
Capital One slumped 7.7 percent to $56.87, while the KBW bank
index slipped 0.9 percent.