Stocks Finish Flat as BP to Pay Up, Halt Dividend - TheStreet

Stocks Finish Flat as BP to Pay Up, Halt Dividend

U.S. stocks closed flat Wednesday after BP agreed to put $20 billion in an escrow account to cover claims from the Gulf oil spill and to suspend dividends. Gregg Greenberg has The Real Story.
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NEW YORK (

TheStreet

) -- Stocks landed near the flat line, where they spent most of Wednesday's session.

BP

(BP) - Get Report

was in the spotlight after the company said it would pay no further dividends in 2010 and pledged to set aside $20 billion to cover claims related to the Gulf of Mexico oil spill.

The

Dow Jones Industrial Average

ended 5 points higher, or up by 0.05%, at 10,410. The

S&P 500

lost nearly a point, or 0.06%, at 1115, while the

Nasdaq

finished not even a point higher at 2306.

Following a more than four-hour meeting with President Obama at the White House, BP Chairman Carl-Henric Svanberg announced that the company will not pay any further dividends this year. BP executives also agreed to place $20 billion in an escrow account to cover damage claims from the Gulf of Mexico oil spill.

BP's American depositary shares gained 1.4% to close at $31.85.

A Spanish news outlet reported that the International Monetary Fund, European Union and U.S. were cobbling together an economic aid package for Spain, which includes a significant credit line, according to

The Associated Press

, though officials later denied the report.

Overseas on Wednesday, Japan's Nikkei rose 1.8%. Markets in Hong Kong and China were closed for a holiday. The FTSE in London gained 0.4%, and the DAX in Frankfurt added 0.3%.

The Economy

Home construction took a step back in May as

housing starts declined to a seasonally adjusted annual pace of 593,000 units from a downwardly revised 659,000 units the month before. Consensus estimates provided by Briefing.com called for the pace to fall to 55,000 units from the originally reported 672,000 in April. Building permits also fell below expectations, dropping to 574,000 last month from 610,000. Permits, which are used to get a feel for future construction, were expected to rise to 631,000.

The Department of Labor released its report on May inflation at the producer level. The department's producer price index fell 0.3%, which was lighter than the consensus estimate calling for a 0.5% fall last month. In April, the PPI edged lower by 0.1%. But after stripping out food and energy costs, the so-called "core" index ticked up by 0.2% in May, just ahead of the forecast for a 0.1% increase.

But the manufacturing sector continues to show strength. Factory output numbers from the

Federal Reserve

bested estimates in the morning, with industrial production advancing 1.2% last month. Forecasts were calling for a 0.8% rise. Capacity utilization, meanwhile, also rose and topped estimates in May to 74.7% after hitting 73.7% in the month before.

Statistics from the Energy Information Administration showed crude oil inventories rose by 1.7 million barrels for the week ending June 11. According to a survey by Platts, several analysts were expecting a drawdown of 1.75 million barrels last week. The EIA figures echoed a buildup reported by the industry's own American Petroleum Institute late Tuesday, saying stockpiles rose by 579,000 barrels according to its assessment.

Gasoline stockpiles dropped by 600,000 barrels, according to the EIA, though many were looking for a buildup of 640,000 barrels. Distillate supplies grew by 1.8 million barrels, easily outpacing estimates for a 760,000 barrel rise.

Company News

Shares of

American Express

(AXP) - Get Report

,

3M

(MMM) - Get Report

and

Caterpillar

(CAT) - Get Report

were leading advancers on the Dow, while

Alcoa

(AA) - Get Report

,

Wal-Mart

(WMT) - Get Report

and

Proceter & Gamble

(PG) - Get Report

were the chief laggards on the blue-chip average.

Stockpickr Tools Beat the Dow Challenge

Sunoco

(SUN) - Get Report

turned in one of the best performances on the S&P, just behind

Priceline.com

(PCLN)

, gaining 6.3% after announcing plans to separate its metallurgical coke unit from the rest of the firm in the beginning of 2011.

FedEx

(FDX) - Get Report

,

GameStop

(GME) - Get Report

and

International Game Technology

(IGT) - Get Report

meanwhile, were putting the most pressure on the index.

FedEx released fourth-quarter earnings, beating forecasts by a penny at $1.33 a share. But underwhelming guidance pressured shares, which closed nearly 6% lower at $78.07.

Nokia

(NOK) - Get Report

issued a sales advisory, warning that dwindling market share and a pressured euro would tug on sales targets. Nokia fell by more than 10% today.

Fannie Mae

(FNM)

and

Freddie Mac

(FRE)

will be

delisting their shares

from the

New York Stock Exchange

effective July 8 on direction from regulators.

The Wall Street Journal

recently reported that

AT&T

(T) - Get Report

has suspended pre-orders of

Apple's

(AAPL) - Get Report

new iPhone 4. Apple shares climbed up 2.9%.

Commodities and the Dollar

Crude oil for July delivery added 73 cents, or 0.9%, to settle at $77.67 a barrel.

Elsewhere in commodity markets, the

August gold contract lost $3.90, to settle at $1,229.30 an ounce.

The

dollar was trading 0.2% higher against a basket of currencies.

Treasuries

The benchmark 10-year Treasury rose 12/32, diluting the yield to 3.266%.

The two-year note was up 1/32, weakening the yield to 0.738%. The 30-year bond was strengthening 19/32, lowering the yield to 4.186%.

--Written by Sung Moss and Melinda Peer in New York

.