US stocks flat before Alcoa, but Google helps Nasdaq

US stocks flat before Alcoa, but Google helps Nasdaq
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First Published: Sat, Jul 10 2010. 12 51 AM IST
Updated: Sat, Jul 10 2010. 12 51 AM IST
New York: The Dow and S&P 500 were little changed on Friday as the S&P was headed for its best week so far this year and investors looked ahead to the start of earnings season.
Google Inc helped lift the Nasdaq, rising 1.6% to $463.68 after Beijing gave the company the green light to continue operating its China Internet search page. US-listed shares of rival Baidu Inc fell 2.7% to $70.46.
The S&P 500 has risen 4.8% so far this week and could notch a fourth straight day of gains on Friday. Most of the advance has been driven by the hope that companies will post strong quarterly results. The earnings season unofficially kicks off on Monday after the closing bell when Alcoa Inc reports.
The aluminum company, the first Dow component to report, is expected to swing to a second-quarter profit, though falling aluminum prices have prompted analysts to cut their estimates on the stock.
Despite the week’s gains, marked by volatility and low volume, sentiment remains fragile. Many investors are concerned that the global economy could experience a double-dip recession. Those fears have driven the S&P 500 down about 12% from its most recent closing high in late April and down about 4% so far this year.
“We’ve had better-than-expected earnings for the past six months, and the big question on everyone’s mind is if that will continue,” said Tom Lydon, president of Global Investment Trends in Newport Beach, California.
“There’s been more discussion that we could see disappointing results, but the proof will be in the pudding.”
The Dow Jones industrial average was up 4.39 points, or 0.04%, at 10,143.38. The Standard & Poor’s 500 Index was up 1.66 points, or 0.16%, at 1,071.91. The Nasdaq Composite Index was up 6.08 points, or 0.28%, at 2,181.48.
Johnson & Johnson was the biggest drag on the Dow, falling 1.3% to $60.56 a day after it recalled more Tylenol and other over-the-counter drugs following consumer complaints of odors. The move expands a recall started in January.
In deal news, Air Products and Chemicals Inc late Thursday raised its hostile bid for rival Airgas Inc by 5.8% to $5.3 billion, but the offer remained slightly below the company’s current market value.
Air Products rose 0.9% to $69.41, while Airgas rose 1.3% to $64.67.
In economic news, US wholesale sales fell unexpectedly in May for the first time in more than a year, lifting inventories to their highest level in 11 months, a government report showed on Friday.
Recent US data showing slowing growth in the services and manufacturing sector, weakness in housing and a stagnating jobs market has worried investors, although most say it is too early to call a “double-dip” recession.
Equity funds worldwide suffered more than $11 billion in net outflows in the first week of July, while money market funds attracted the biggest inflows in 18 months, fund tracker EPFR Global said.
In addition to Alcoa, companies reporting next week include JPMorgan Chase & Co, Bank of America Corp and General Electric Co.
The banks will be scrutinized by investors concerned about delinquencies and loan demand to gauge the sustainability of a recent improvement in credit quality.
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First Published: Sat, Jul 10 2010. 12 51 AM IST
More Topics: Markets | US | Stocks | Google Inc | Alcoa Inc |