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US STOCKS-S&P flat after data; Microsoft weighs on Nasdaq

Published 10/04/2010, 10:38 AM
Updated 10/04/2010, 10:40 AM
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* Pending home sales rise, factory orders edge lower

* Microsoft lower after Goldman downgrade

* Switzerland sets new rules for Credit Suisse, UBS

* Indexes: Dow flat, S&P off 0.16 pct, Nasdaq off 0.4 pct

* For up-to-the-minute market news see [STXNEWS/US] (Updates prices, adds pending home sales, factory orders data)

By Ryan Vlastelica

NEW YORK, Oct 4 (Reuters) - The Dow and S&P 500 were little changed on Monday as concerns about bank profits, spurred by new Swiss capital rules, were offset by upbeat housing data, while Microsoft fell after a ratings downgrade, weighing on the Nasdaq.

Pending home sales rose more than expected in August, indicating the housing market was regaining some stability, and August factory orders fell slightly more than forecast. For details, see [ID:nN04102686] and [ID:nN04108989]

Swiss regulators will require global banks UBS AG and Credit Suisse to hold far more capital than their international rivals to prevent a crisis that could cripple the country. The new rules could crimp competitiveness in investment banking. [ID:nLDE6920GP]

Concerns about Europe's banking system have been a headwind for U.S. stocks in recent months, even as some improving domestic data eased concerns over a possible double-dip recession. The S&P 500 recently finished its best quarter in a year, though the index has struggled to break out of the 1,130-1,150 range.

"These austerity measures are necessary, but don't have a stimulating effect on the market," said Malcolm Polley, president and chief investment officer of Stewart Capital Advisors in Indiana, Pennsylvania. "It could mean that equity returns will be muted, though not necessarily down, for quite a while."

The Dow Jones industrial average <.DJI> was up 2.80 points, or 0.03 percent, at 10,832.48. The Standard & Poor's 500 Index <.SPX> was down 1.78 points, or 0.16 percent, at 1,144.46. The Nasdaq Composite Index <.IXIC> was down 8.74 points, or 0.37 percent, at 2,362.01.

Microsoft Corp was the top percentage loser on the Dow, falling 2.1 percent to $23.87 after Goldman Sachs downgraded the stock to "neutral," citing competition from tablet computers. [ID:nSGE6930CY]

Actel Corp surged 31 percent to $20.92 after chipmaker Microsemi Corp said it would buy its smaller rival. [ID:nSGE69306B]

GTSI Corp tumbled 41 percent to $4.30 after Eyak Technology withdrew a buyout offer. [ID:nWNAB1405]

This week marks the unofficial start of the third-quarter earnings season, with Alcoa Inc due to report on Thursday. Micron Technology Inc , PepsiCo Inc and Monsanto Co are all set to report this week. (Editing by Jeffrey Benkoe)

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