Mon Aug 2, 2004
By Michael Flaherty

NEW YORK (Reuters) - U.S. stocks were little changed on Monday despite warnings of possible attacks on U.S. financial institutions and persistently high oil prices.

Citigroup Inc. (C.N: Quote, Profile, Research) , Prudential Financial Inc. (PRU.N: Quote, Profile, Research) , the International Monetary Fund, the New York Stock Exchange and the World Bank were included in a "high" level threat alert by the Department of Homeland Security, which said the attacks could come from al Qaeda.

The warnings boosted U.S. crude oil prices to a record high of $43.92 a barrel in overnight trading before prices slipped to $43.52 by noon on Monday. Higher oil prices typically cut into corporate profits, as it remains a vital component for transport and manufacturing.

But a strong earnings report from Dow component Procter & Gamble Co. (PG.N: Quote, Profile, Research) and a government report showing manufacturing growth added some bright spots to an otherwise dark morning.

The Dow Jones industrial average was up 2.95 points, or 0.03 percent, at 10,142.66. The Standard & Poor's 500 Index was down 1.19 points, or 0.11 percent, at 1,100.53. The technology-laced Nasdaq Composite Index was down 9.81 points, or 0.52 percent, at 1,877.55.

U.S. stocks trimmed early losses suffered mainly from the government warnings, signaling that investor worries weren't as extreme as initially expected.

"These warnings are something we're learning to live with," said Lisa Hansen, head trader at Transamerica Investment Management. "We're not going to see a significant move in the market unless there's an event that drives it."

The Institute for Supply Management said U.S. manufacturing expanded in July for a 14th straight month, matching analysts expectations.

But in another report, the government said outlays for U.S. construction fell unexpectedly in June as spending on housing dropped for the first time in 16 months.

Lifting the Dow was Procter & Gamble, maker of Tide laundry detergent, which reported a better-than-expected quarterly profit. The company's stock rose $1.55, or 3 percent, to $53.70 on the New York Stock Exchange.

Shares of education stocks took a hit after Corinthian Colleges Inc. (COCO.O: Quote, Profile, Research) lowered its quarterly earnings forecast. Corinthian Colleges plunged $8.47, or 45 percent, to $10.28 on the Nasdaq.

Apollo Group Inc. (APOL.O: Quote, Profile, Research) fell $10.65, or 13 percent, to $72.83 on the Nasdaq. Career Education Group (CECO.O: Quote, Profile, Research) tumbled $4.40, or 13 percent, to $29.42 on the Nasdaq. ITT Education (ESI.N: Quote, Profile, Research) lost $1.98, or 6 percent, to $29.87 on the New York Stock Exchange.

Shares of the two financial companies whose buildings were mentioned in the government warnings as possible targets were lower. Citigroup dipped 19 cents to $43.89 and Prudential fell 76 cents to $45.80.

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