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Market flat as data offsets Wachovia loss

14/04/2008 - 15:21

By Jennifer Coogan

NEW YORK (Reuters) - Stocks were little changed on Monday after a surprise gain in March retail sales offset news that Wachovia Corp , the fourth-largest U.S. bank, reported an unexpected quarterly loss.

Wachovia said it would cut its dividend, eliminate jobs and raise capital of $7 billion after becoming the latest casualty of the global credit crunch.

Wachovia shares fell more than 10 percent. The S&P financial sector index <.GSPF> was down 1.4 percent.

Stocks took a sharp tumble on Friday when economic bellwether General Electric Co reported an unexpected 6 percent drop in earnings.

"Bad news is the standard order of the day, and the market is not going to jump through hoops for these numbers. I don't think anyone's shocked Wachovia is having to grapple with this," said Peter Kenny, managing director at Knight Equity Markets in Jersey City, New Jersey. "GE was a bigger drag because it speaks to a much larger, global footprint."

The Dow Jones industrial average <.DJI> was up 4.65 points, or 0.04 percent, at 12,330.07. The Standard & Poor's 500 Index <.SPX> was down 2.13 points, or 0.16 percent, at 1,330.70. The Nasdaq Composite Index <.IXIC> was down 7.90 points, or 0.34 percent, at 2,282.34.

On the positive side, retail sales unexpectedly rose in March, pushed up by a jump in gasoline sales, a government report showed.

Oil companies gave the S&P 500 its biggest boost. Shares of Devon Energy were up 2.1 percent to $111.55 and Transocean Inc shares rose 2.3 percent to $148.45.

Wachovia's stock fell 10.3 percent to $24.95. Dow components Bank of America declined 2.5 percent to $36.01 and Citigroup was off 3.2 percent $22.61.

Adding to earnings concerns was a lowered forecast for , Standard & Poor's 500 companies earnings. Wall Street analysts expect them to show a 13.8 percent decline in quarterly profits compared with an 11.8 percent drop projected one week ago, according to Reuters Estimates.

Movie rental chain Blockbuster Inc said on Monday that it had offered to buy struggling electronics retailer Circuit City Stores Inc . Circuit City shares rose 34.6 percent at $5.25, while Blockbuster shares fell 11.5 percent at $2.77.

In other earnings news, shares of Eaton Corp rose 2.6 percent to $81.01 after the manufacturer reported higher quarterly profit. Building maintenance supply company W.W. Grainger Inc posted a 12 percent rise in first-quarter profit, beating analysts' forecasts. Its stock rose 2.7 percent to $82.16.

(Editing by Kenneth Barry)


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