Mon Jul 19, 2004
By Rachel Cohen

NEW YORK (Reuters) - U.S. stocks were little changed on Monday as investors remained cautious after mixed earnings and before congressional testimony from Federal Reserve Chairman Alan Greenspan beginning on Tuesday.

Blue chips were weighed down by a disappointing outlook from 3M Co. (MMM.N: Quote, Profile, Research) .

"The weakness is basically coming from the Dow, particularly 3M," an S&P futures trader said. "Their guidance was not as positive as what The Street wanted. We are waiting for Greenspan tomorrow."

Technology bellwether Microsoft Corp. (MSFT.O: Quote, Profile, Research) got a boost, however, after a Goldman Sachs analyst said the software maker may beat the consensus forecasts when it reports quarterly results later this week, citing evidence from the reports of computer makers.

Investors are also awaiting testimony on monetary policy from Greenspan, who will go before Congress to deliver his semiannual report on Tuesday and Wednesday. Greenspan is likely to assure lawmakers recent signs of a slowdown are merely a lull and that rates need to rise gradually to keep the recovery healthy.

The Dow Jones industrial average dipped 15.19 points, or 0.15 percent, to 10,124.59. The broader Standard & Poor's 500 Index was up 1.11 points, or 0.1 percent, at 1,102.50. The technology-laced Nasdaq Composite Index added 1.4 points, or 0.07 percent, to 1,884.55.

Microsoft gained after Goldman Sachs analyst Rick Sherlund said it may beat the consensus forecasts. But the veteran Microsoft analyst left his estimates for the company's fourth quarter ended in June unchanged. Microsoft was up 39 cents, or 1.4 percent, to $27.87, making it the biggest boost to the broad S&P 500 and the technology-packed Nasdaq.

Dow component 3M, whose products range from Post-It notes and Scotch tape to drugs and flexible circuits, capped the gains on the Dow after it issued a third-quarter forecast a penny below analysts' consensus estimates. It also raised its 2004 earnings forecast to a range that failed to exceed analysts' consensus forecast.

It dropped $4.17, or 4.8 percent, to $83.67 and was the biggest drag on the Dow and broader S&P 500.

Toolmaker Black & Decker Corp. (BDK.N: Quote, Profile, Research) soared above a 20-year high after it said it will buy Pentair Inc.'s (PNR.N: Quote, Profile, Research) power tools group for about $775 million, nearly doubling the sales of its North American professional tools business. It also reported a 61 percent rise in second-quarter profit.

After rising as high as $69.50, Black & Decker was up $7.61, or 12.6 percent, to $67.93 on the New York Stock Exchange.

Boston Scientific Corp. (BSX.N: Quote, Profile, Research) fell after it said on Friday it had expanded its recall of a popular heart device because of a malfunction. It lost $1.27, or 3.4 percent, to $36.13 on the NYSE. (Additional reporting by Doris Frankel)

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