Dow and S&P Flat

The Dow and the S&P 500 ended little changed on Monday as soaring commodity prices lifted Alcoa and Exxon Mobil, offsetting fears of more fallout from the housing slump, while the Nasdaq fell after brokers cut their price targets on Apple.

The surge in the prices of gold, oil, platinum and silver prompted investors to buy the shares of natural resources companies, including Alcoa Inc, which ended up 3.2 per cent at $38.32, and Exxon Mobil Corp, up nearly 1 per cent at $87.75.

But financial shares took a beating after Thornburg Mortgage Inc, a high-profile mortgage lender, said it does not have enough cash to meet its creditors' demands, driving its stock down 51.5 per cent to $4.32 on concerns it might file for bankruptcy. The lender's woes troubled investors since it specializes in jumbo mortgages considered among the less risky home loans.

Souring profit expectations also hurt bank shares, pulling Citigroup Inc down 2.6 per cent and Bank of America Corp down 1.4 per cent. An Oppenheimer and Co. analyst cut earnings-per-share estimates on three U.S. brokers.

Apple Inc dropped 2.6 per cent to $121.73, weighing on the Nasdaq, after RBC Capital Markets and Banc of America Securities cut their price targets on the stock of the iPhone and iPod maker.

The Dow Jones industrial average ended down 7.49 points, or 0.06 per cent, at 12,258.90. The Standard & Poor's 500 Index rose 0.71 of a point, or 0.05 per cent, to close at 1,331.34. The Nasdaq Composite Index slipped 12.88 points, or 0.57 per cent, to finish at 2,258.60. Billionaire investor Warren Buffett's comments that a recession was already under way also rattled investors, and contributed to declines among other economically sensitive sectors, including the shares of home builders. Market breadth in regular trading was overly negative, with decliners outpacing advancers on both the NYSE and the Nasdaq. More stocks hit fresh 52-week lows than new highs, reflecting a broadly bearish tone.

Boeing Co was the biggest drag on the Dow after the defense contractor and plane maker lost a multibillion-dollar U.S. Air Force contract to competitors. Boeing shares fell 2.6 per cent to $80.67 on the New York Stock Exchange. After the closing bell, shares of Barnes & Noble dropped 5 per cent to $26.90 after the top U.S. bookseller said 2008 could be "an especially challenging retail year."