10:14 PM
NEW YORK |
NEW YORK (Reuters) - Stocks that outperform in a weak economy helped the Dow and S&P 500 eke out gains on Thursday as concerns about faltering growth and inflation prompted investors to seek out less volatile names.
The Dow industrials' top percentage gainers were Coca-Cola Co (KO.N), up 1.5 percent, Kraft Foods Inc (KFT.N), up 1.7 percent and Merck & Co (MRK.N), up 1.2 percent.
Energy shares also rallied as U.S. crude oil futures gained more than 1 percent to trade above $108 a barrel.
The S&P 500 fell almost 1 percent early but found support near 1,300, a level that attracted buying interest in early March. Failing to hold that level could trigger a test of the benchmark's 2011 low near 1,257.
Stocks have sagged lately as economists have lowered forecasts for U.S. growth. A Reuters poll of economists showed 2011 gross domestic product forecasts fell to 2.9 percent from 3.1 percent.
"GDP forecasts are continuing to fall, so (bets on defensives) are a safety trade," said Peter Boockvar, equity strategist at Miller Tabak & Co in New York.
Adding to the bearish sentiment, Google Inc (GOOG.O) shares fell 5 percent to below $550 in extended trading after the company's first-quarter profit fell short of Wall Street's target as operating expenses surged.
The Dow Jones industrial average .DJI rose 14.16 points, or 0.12 percent, to end at 12,285.15. The Standard & Poor's 500 .SPX gained 0.11 of a point, or 0.01 percent, to 1,314.52. The Nasdaq Composite .IXIC dropped 1.30 points, or 0.05 percent, to 2,760.22.
GOLDMAN FALLS, EL PASO GAINS
A Senate investigation of Goldman Sachs (GS.N) hurt the Wall Street giant and some of its peers, while an unexpected rise in jobless claims added to bearish sentiment that kept gains in check.
Goldman shares fell 2.7 percent to $155.79 and were a drag on the S&P financial sector index .GSPF, which was down 0.9 percent.
Further weighing on financials, major housing lenders agreed late on Wednesday to costly fixes of their foreclosure practices as part of a settlement with U.S. bank regulators that jumped ahead of a states' probe.
The KBW Banks Index .BKX dropped 1.1 percent.
Adding to the boost from the energy sector as oil prices rose, natural gas producer and pipeline company El Paso Corp (EP.N) said it will develop a shale oil field without a partner. El Paso shares jumped 5.5 percent to $18.26 to lead gains in the S&P energy sector index.GSPE, which rose 0.6 percent.
"Oil closed above $108 so all the energy stocks rallied this afternoon," Boockvar said.
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