US stocks: Blue-chips flat, oil outweighs earnings

NEW YORK - US blue-chip stocks ended little changed today as crude oil prices climbed above US$75 a barrel, increasing concerns about higher energy costs and offsetting optimism about strong quarterly earnings.

The Nasdaq ended down sharply. Analysts raised concerns about the outlook for computer maker Dell Inc., which helped drag down tech shares. Still, the Dow Jones industrial average reached a six-year high for a second day.

The Dow industrials and S&P 500 indexes had been up for much of the session, boosted by encouraging results from companies including manufacturer 3M Co. and Google Inc., but the fresh jump in oil prices induced selling.

"We're closer to US$80 (a barrel) than to US$70, and that's kind of discouraging," said Larry Peruzzi, senior equity trader at The Boston Company Asset Management, a Mellon subsidiary.

"It's getting to a point where ... consumers really start to notice it and start to curtail their spending," he added.

The Dow ended up 4.56 points, or 0.04 per cent, at 11,347.45. The Standard & Poor's 500 Index closed down 0.18 points, or 0.01 per cent, at 1,311.28. However, the Nasdaq Composite Index was down 19.69 points, or 0.83 per cent, at 2,342.86.

For the week, the Dow ended up 1.9 per cent, the S&P gained 1.7 per cent and the Nasdaq finished 0.7 per cent higher.

Supply worries pushed US crude futures to all-time highs. Crude for June delivery settled up US$1.48 at US$75.17 after trading as high as US$75.35, the highest for front-month crude since the New York Mercantile Exchange started trading oil futures in 1983.

With oil trading at record highs in recent weeks and the benchmark 10-year Treasury note now yielding more than 5 per cent, equity investors have been concerned that both could hurt corporate profits down the road.

Google, the world's most-used Web search engine, rose more than 5 per cent a day after the tech bellwether reported earnings that easily beat estimates. Google shares rose 5.3 per cent, or US$22.10, to US$437.10.

3M, the maker of Scotch tape and Post-It notes, announced a 16.6 per cent increase in quarterly profit and boosted its full-year forecast.

Shares of 3M rose 3 per cent, or US$2.46, to US$85.06 and gave the biggest lift to the Dow. The blue-chip gauge is about 3 per cent below its record high of 11,750.28 reached on Jan. 14, 2000.

"Earnings are coming in better than expected ... but the overriding concern to me is high energy prices and what the Fed is doing," said Barry Hyman, equity market strategist, Ehrenkrantz, King, Nussbaum.

The Federal Reserve, the US central bank, is widely expected to raise benchmark short-term interest rates by a quarter percentage point, to 5 per cent, at its next policy meeting on May 10, to ward off inflationary pressures.

In Nasdaq trading, Dell lost 4.4 per cent, or US$1.23, to US$27.01 and was among the biggest drags on the Nasdaq.

A broker downgraded the computer maker, saying the company is losing its price advantage.

Shares of energy companies including Exxon Mobil Corp. rose as oil prices surged. Exxon gained 1.7 per cent, or US$1.08, to US$65, and helped to support the broad S&P index.

Friday also marked the monthly expiration of April options, which traders said added to volatility as players unwound positions against stock and derivative products.

Trading was active on the New York Stock Exchange, with about 1.77 billion shares changing hands, above last year's daily average of 1.61 billion, while on Nasdaq, about 2.37 billion shares traded, above last year's daily average of 1.80 billion.

Advancing stocks outnumbered declining ones by a ratio of 9 to 8 on the NYSE, while decliners outnumbered advancers by about 8 to 7 on Nasdaq.

- REUTERS