(Updates to mid-afternoon)
By Kristina Cooke
NEW YORK, Jan 7 (Reuters) - U.S. stocks were little changed
in a whipsaw session on Monday as economic worries offset gains
in shares of companies that tend to weather slowdowns.
Stocks seesawed from positive to negative as fears of a
recession persisted after Friday's jobs report and geopolitical
concerns weighed after an incident involving U.S. Navy and
Iranian ships in a major oil shipping route in the Gulf.
U.S. President George W. Bush said on Monday the U.S.
economy is well positioned to withstand shocks from the housing
slump, financial market turmoil and high oil prices, but
continued economic expansion is not a certainty.
Shares of Boeing Co <BA.N> were the top drag on the Dow,
down 3.6 percent at $82.70, as investors worried that the
global economy might suffer from a U.S. slowdown. Honeywell
International <HON.N>, another economic bellwether, fell 1.3
percent to $57.54.
Defensive plays lent support, however. Drug makers, such as
Merck & Co <MRK.N>, and companies that make consumer staples,
such as cigarette maker Altria Group Inc <MO.N>, rose.
"There's a couple of things, the jobs report and instances
over the weekend with Iran and the U.S. that means you are
seeing a bit of a flight to defensive names," said Bennett
Gaeger, managing director at Stifel Nicolaus in Baltimore.
The Dow Jones industrial average <> was down 15.21
points, or 0.12 percent, at 12,784.97. The Standard & Poor's
500 Index <.SPX> was down 0.71 points, or 0.05 percent, at
1,410.92. The Nasdaq Composite Index <> was down 11.10
points, or 0.44 percent, at 2,493.55.
Major indexes had started the year sharply lower last week,
albeit in thin volume. By Monday, most trading desks were fully
staffed.
Technology shares fell, with Apple <AAPL.O> the biggest
drag on the Nasdaq. Apple fell 3 percent to $174.58.
Merck shares gained 1.4 percent to $57.54 on the New York
Stock Exchange, while shares of Altria, parent of cigarette
maker Philip Morris USA, gained 2.5 percent to $76.80.
Eli Lilly <LLY.N> posted its biggest one-day advance in
more than 2-1/2 years on news Morgan Stanley upped its
recommendation on the drugmaker's stock. Its stock was up 4.5
percent to $54.12.
Utilities also gave the market support, led by FPL Group
Inc <FPL.N> which gained 4 percent to $71.57.
A sharp pullback in crude oil prices <CLc1> lent some
support to the broader market, but hurt shares of energy
companies. Exxon Mobil <XOM.N> fell 1.8 percent to $90.44 and
was the top drag on the S&P 500.
U.S. crude tumbled 2.7 percent a barrel to $95.14 on the
New York Mercantile Exchange as unseasonably warm weather and
worries of a looming recession in the United States, the
world's top oil consumer, outweighed tensions between Iran and
the United States.
The Pentagon said five Iranian boats made aggressive
maneuvers and showed hostile intent against three U.S. Navy
ships at the weekend in the Strait of Hormuz. Oil flows through
the Strait account for roughly 40 percent of globally traded
oil, according to the U.S. Energy Information Administration.
(Editing by James Dalgleish)
