U.S. stocks little changed after PPI, Nokia

Thu Jul 15, 2004
By Michael Flaherty

NEW YORK, July 15 (Reuters) - U.S. stocks were little changed on Thursday after a drop in sales by mobile phone maker Nokia offset investors' optimism sparked by a report showing tame inflation in June.

Nokia (NOK.N: Quote, Profile, Research) weighed on technology shares after it reported weak quarterly sales in handsets, but positive earnings news from Apple Computer (AAPL.O: Quote, Profile, Research) and Citigroup Inc. (C.N: Quote, Profile, Research) helped to limit losses in the market.

The key economic news of the morning was a Labor Department report showing that producer prices fell in June, restrained as the costs of energy goods fell sharply,

"The PPI was in line with expectations. So that was probably the best of the bunch this morning considering that jobless claims were up a little bit and the industrial production numbers were well below expectations." said John Caldwell, chief investment strategist at McDonald Financial Group.

The Dow Jones industrial average was down 12.98 points, or 0.13 percent, at 10,196. The Standard & Poor's 500 Index was down 1.35 points, or 0.12 percent, at 1,110. The technology-laced Nasdaq Composite Index was down 2.01 points, or 0.1 percent, at 1,913.

The Labor Department report said the PPI declined 0.3 percent in June versus a 0.8 percent rise in May. The closely watched measure of core producer prices, which strips out food and energy costs, gained by 0.2 percent.

In another report, the number of Americans filing initial claims for unemployment pay grew by more than expected last week, government data showed on Thursday, but was due in large part to seasonal factors.

U.S. crude oil prices were above $40 a barrel and approaching June's peaks, which again were raising concerns that higher fuel prices may threaten the U.S. economic recovery and slow profit growth.

3M Co. (MMM.N: Quote, Profile, Research) gave a boost to the Dow after the U.S. Food and Drug Administration approved its Aldara drug as a treatment for a form of skin cancer. The stock rose 71 cents, or 1 percent, to $88.85 on the New York Stock Exchange.

Global mobile handset leader Nokia (NOK.N: Quote, Profile, Research) reported a drop in sales in handset and core earnings due to fierce competition and a weak product range. It warned profitability would suffer for the rest of 2004. Nokia fell $2.10, or 14.8 percent, to $12.15 on the New York Stock Exchange.

Apple Computer pulled up the Nasdaq, jumping $4, or 13.6 percent, to $33.50. Apple posted quarterly net income on Wednesday that more than tripled.

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