Dow, S&P flat, but Oracle drags Nasdaq down : US Business

By Cal Mankowski

NEW YORK (Reuters) - The Dow and S&P 500 were little changed on Thursday after a Fed official's comments briefly lifted financial shares from session lows, while Oracle's disappointing quarterly revenue pulled the Nasdaq down.

U.S. oil futures climbed near $107 a barrel, lifting energy shares. Exxon Mobil shares gained 1 percent and ranked as the top advancer in both the Dow and S&P.

A Lehman Brothers spokeswoman said market rumors about the company were unfounded, also helping the financial sector regain some equilibrium. Lehman's stock was down 4.5 percent at $40.59, after earlier falling to a session low at $38.36.

Technology shares, however, dragged on all three major U.S. stock indexes. Oracle slid 7.3 percent to $19.41 and topped the list of major decliners in both the Nasdaq and the Standard &Poor's 500 Index.

Cleveland Fed President Sandra Pianalto said the Federal Reserve broadened its policy measures in order to minimize the effects of the credit crisis.

"The Fed is out saying they have a responsibility to fund banks, trying to inject calm into the markets. The Fed is going to stand in there," said Sal Arnuk, co-manager of trading at Themis Trading in Chatham, New Jersey.

The Dow Jones industrial average <.DJI> rose 1.63 points, or 0.01 percent, to 12,424.49. The Standard & Poor's 500 Index <.SPX> inched up 0.11 point, or 0.01 percent, to 1,341.24. But the Nasdaq Composite Index <.IXIC> fell 17.20 points, or 0.74 percent, to 2,307.16.

The S&P index of financial shares <.GSPF> was down 0.05 percent at 345.40, well off its low for the day so far at 339.25.

U.S. crude oil futures surged to a session high above $107 a barrel after saboteurs blew up one of Iraq's two main pipelines. Exxon Mobil was up 1.1 percent at $87.24, while Chevron was up 0.6 percent at $85.48.

In the tech sector, Google Inc fell 2.8 percent to $445.47 after Lehman Brothers cut its first-quarter earnings forecast, citing a weakening economy that could hurt advertising budgets.

A report by a Web measurement firm on Wednesday showed modest 3.1 percent growth in February for Google's "paid clicks." The growth was down sharply from six months ago.

Al Goldman, chief market strategist at Wachovia Securities in St. Louis, said the news on Oracle and Google raised concern about slowing profits in the tech sector.

Goldman said that while stocks appear to have made major lows in January, "confidence is still razor thin."

Stocks had been down for most the morning but around midday, the S&P 500 and Dow turned slightly higher as financial shares briefly pulled off session lows.

Clear Channel Communications Inc was a bright spot, climbing 12 percent to $30.09 after it won a temporary order preventing banks from reneging on commitments to fund the $20 billion buyout of the U.S. radio station operator. . The stock was No. 3 among the S&P 500's biggest advancers.

Shares of ConAgra Foods Inc rose 7.2 percent to $23.47 a share after the company raised its fiscal 2008 earnings forecast. The company also reported higher-than-expected quarterly profit on Thursday and said it will sell its commodity trading and merchandising operations in a $2.1 billion deal.

But shares of upscale home goods retailer Williams-Sonoma Inc fell 5 percent to $23.71 after it issued a cautious outlook for the rest of the fiscal year as concerns about consumer spending persist.

Before Wall Street's opening bell, the Commerce Department said U.S. corporate profits fell 3.3 percent in the fourth quarter in a report that also confirmed U.S. economic growth, measured by gross domestic product, was at a meager annual pace of 0.6 percent in the same period. GDP is the measure of all goods and services produced within U.S. borders.

(Additional reporting by Justin Grant; Editing by Jan Pachal)

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