(Updates to close)
* Goldman says sell financials, consumer discretionary
* Bunge agrees to buy Corn Products for $4.4 billion
* Energy shares gain as oil rises
By Kristina Cooke
NEW YORK, June 23 (Reuters) -The Dow and the S&P 500 ended
effectively unchanged on Monday in thin trade as renewed
concerns about the outlook for financial shares offset gains
in energy stocks and news of a $4.4 billion takeover in the
agricultural sector.
Consumer discretionary stocks took a beating after Goldman
Sachs recommended that clients "sell" the sector on economic
concerns. Shares of coffee chain Starbucks <SBUX.O>, online
retailer eBay <EBAY.O> and iPod maker Apple <AAPL.O> fell,
pushing the Nasdaq lower.
Financial stocks weighed on the market after Goldman Sachs
backtracked on its May recommendation, telling clients to sell
the sector as credit conditions deteriorate.
Also hurting financials and pushing the Financial Select
Sector SPDR fund <XLF.A> down to a 5-year low were comments by
Banc of America Securities that it expects more write-downs at
investment banks Merrill Lynch <MER.N> and UBS AG <UBSN.VX>.
Volume was thin, however, with traders hesitant to place
any big bets before the Federal Reserve's next interest-rate
decision, due on Wednesday, when it is expected to leave its
benchmark interest rate unchanged.
But gains in shares of energy companies, including Exxon
Mobil <XOM.N>, lent some support, after Saudi Arabia's output
boost was seen as too little to limit soaring oil prices.
Also keeping losses in check was news that fertilizer
producer Bunge Ltd <BG.N> agreed to buy Corn Products
International Inc <CPO.N>.
"There's continued concerns about further credit
deterioration. Goldman said things are worse than we thought--
and in general, there doesn't appear to be a light at the end
of the tunnel yet," said Bucky Hellwig, senior vice president
at Morgan Asset Management, in Birmingham, Alabama.
The Dow Jones industrial average <> dipped just 0.33
of a point to finish essentially flat at 11,842.36. The
Standard & Poor's 500 Index <.SPX> edged up just 0.07 of a
point, or 0.01 percent, to close at 1,318.00. The Nasdaq
Composite Index <>, meanwhile, fell 20.35 points, or 0.85
percent, to close at 2,385.74.
Shares of Merrill Lynch fell 3.9 percent to $34.54, after
Banc of America Securities said it expects the investment bank
to write down $3.5 billion in the second quarter.
Insurer American International Group's <AIG.N> shares fell
5.6 percent, making it one of the top drags on the Dow after
Barron's newspaper said the stock "will likely be dead money
for some time to come," citing the potential for more
accounting woes ahead.
AIG shares declined to $30.30 on the New York Stock
Exchange, while Bank of America's stock slid 4.5 percent to
$25.88, and JPMorgan shares fell 2.6 percent to $36.87.
Corn Products <CPO.N> shares jumped 18.3 percent to $50.75
on the NYSE, while Bunge shares sank 9.4 percent to $110.70.
Among energy shares, Exxon shares rose 3.3 percent to
$87.70 while Chevron <CVX.N> rose 2.5 percent to $99.06.
Among stocks sensitive to consumer discretionary spending,
Starbucks fell 5.4 percent to $16.30, eBay shed 1.6 percent to
$27.73, and Apple <AAPL.O> slid 1.2 percent to $173.16, all in
Nasdaq trading.
Trading was light on the New York Stock Exchange, with
about 1.09 billion shares changing hands, below last year's
estimated daily average of roughly 1.90 billion, while on
Nasdaq, about 1.91 billion shares traded, also below last
year's daily average of 2.17 billion.
Declining stocks outnumbered advancing ones by a ratio of
about 2 to 1 on the NYSE and about 5 to 2 on the Nasdaq.
(Editing by Jan Paschal)
