Business Blog Posts

* Corporate earnings are expected to dominate the trading session, with some caution prevailing over the strength of U.S. corporate earnings this season.

* Shares in technology firm Google fell more than 5 percent in extended trading on Thursday as the firm reported a surge in spending in the first quarter.

* Banks will be in the spotlight as Bank of America reports quarterly earnings, with analysts expecting the lender to post a 9 percent drop in first-quarter profit.

* Consumer price data for March will be eyed at 1230 GMT for an indication of the effect of energy and food prices on inflation numbers. Although core inflation figures are expected to record the same gain as in February, up 0.2 percent, any move higher could put pressure on the Federal Reserve's monetary policy.

* In China, inflation jumped to a 32-month high, reinforcing the view that the government will have to do more to rein in prices.

* Other data scheduled for release include the New York Fed's Empire State manufacturing index for April at 1230 GMT and the Thomson Reuters/University of Michigan consumer sentiment report at 1355 GMT.

* Stocks on the Dow Jones industrial average and the S&P 500

pared earlier falls to eke out marginal gains at the close on Thursday, with concerns about faltering growth and inflation prompting investors to seek out less volatile names.

* In company news, the U.S. securities regulator is in talks with Wall Street banks including JPMorgan Chase, Citigroup Inc, Morgan Stanley, Merrill Lynch and UBS, to settle fraud allegations relating to the sale of toxic mortgage bonds, the Wall Street Journal reported.

* Ford Motor Co will bring 15 new vehicles to China by 2015, its China chief said on Friday, as it accelerates expansion in the world's largest auto market.

* Groupon is likely to pick Goldman Sachs and Morgan Stanley to lead a second-half initial public offering that could value the fast-growing daily deals site at $15 billion to $20 billion, a source familiar with the matter said on Thursday.

* Transocean Ltd, the world's largest offshore drilling contractor, has pulled three rigs off the market due to lack of demand, while putting two older shallow-water rigs up for sale.

* Chrysler Group LLC is close to launching a debt refinancing package to repay its U.S. and Canadian government loans and has selected four banks to lead the deal, people familiar with the matter said.

* In Europe, the FTSEurofirst 300 index of top shares was flat in early trade, with financials featuring among the top decliners as concerns about the euro zone debt crisis resurfaced after Moody's cut Ireland's sovereign rating by two notches.

(Reporting by Harpreet Bhal, Editing by Mark Potter)

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.

Shares of Google slid more than 5 percent as investors zeroed in on the rise in expenses to $2.84 billion. This dwarfed a 29 percent jump in net revenue and reflected a record hiring spree, company-wide salary raises, and splurging on everything from marketing to technology.

Analysts expect co-founder and new Chief Executive Larry Page to keep spending on new products to spearhead an aggressive push into areas such as social networking and mobile businesses. Google executives said on Thursday the dramatically stepped-up spending was part of the company's plan to chase multibillion business opportunities.

Page, 38, a media-averse technology visionary who took over as CEO this month from decade-long veteran Eric Schmidt, came on a conference call with analysts for just a few minutes, disappointing some eager to hear his plans to jump-start growth and innovation.

Page expressed his optimism in his company's future, then departed, leaving a trail of questions that analysts directed at the other executives.

"My sincere hope is that over time he (Page) enunciates the strategy much more clearly," said Jim Tierney, chief investment officer of asset manager WP Stewart, which owns Google shares.

Page is expected to bolster innovation and cut bureaucracy as Google battles social networking leader Facebook and Apple Inc. But his brief remarks on Thursday's call did little to reassure Wall Street about the management change.

"You got expenses growing faster than revenue and some people were caught by surprise by the willingness of the company to spend," said BGC Partners analyst Colin Gillis.

"But Larry Page has signaled pretty clearly that he is going to be driving up expenses. If the expenses are targeted and result in future revenue streams, then good for Larry. If not, that results in an undisciplined spending approach."

Google plans to hire more than 6,000 people this year, after taking a record 2,000 on board in the quarter and raising salaries by about 10 percent across the board on January 1.

"The discipline of the company has not changed; we're just really bullish on our prospects," Chief Financial Officer Patrick Pichette told analysts. "I can tell you every element of the company (expenses from real estate to food) is scrubbed and scrutinized."

WHAT'RE YOUR INTENTIONS?

The focus on Google's spending overshadowed strong first quarter net revenue growth of 29 percent year-over-year to $6.54 billion, above the $6.32 billion expected by analysts.

For a company of Google's size "that's fairly magnificent," said WP Stewart's Tierney. "There are not a whole lot of companies in any segment that can do that."

Google said drivers of its topline growth included an 18 percent jump in the paid clicks on its search ads, bolstered by new types of retail ads featuring product images, as well as momentum in mobile ads and video ads on its YouTube website.