Energy, tech shares lead the market

By Charley Blaine and Elizabeth Strott

The place to be in stocks today was energy and technology -- for good reason.

Crude oil closed at a new high of $117.48, giving energy stocks a boost, and tech stocks continued a big April rally that has seen the sector move 7% higher this month.

Anything else left investors frustrated: Especially financial stocks after Bank of America (BAC, news, msgs) reported a 71% profit decline in the first quarter and National City (NCC, news, msgs), the Cleveland banking company, raised $7 billion in new capital but slashed its dividend from 21 cents to 1 cent.

As a result, stocks finished basically flat today. The Dow Jones industrials were down 24 points to 12,825. The Standard & Poor's 500 Index was off 2 points to 1,388. But, thanks to gains in such key stocks as Apple (AAPL, news, msgs), Microsoft (MSFT, news, msgs) and SanDisk (SNDK, news, msgs), the Nasdaq Composite Index was up about five points to 2,408.

Apple finished up 4.4% to $168.16; the stock is up 17% in April but still down 15% on the year. Microsoft, the publisher of MSN Money, added 1.4% to $30.42, bringing its April gain to 7.2%. SanDisk jumped 4.1% to $28.52; it's up 26% this month.

But the market may be on edge on Tuesday after chip maker Texas Instruments (TXN, news, msgs) disappointed Wall Street with its second-quarter guidance. TI's first-quarter report was the first of a series of tech earnings reports this week, including Yahoo (YHOO, news, msgs) on Tuesday, Apple on Wednesday and Microsoft on Thursday.

Yahoo's report, due after Tuesday's close, will be the most closely watched of the day because of its possible effect on Microsoft's takeover bid. Yahoo was up 0.4% today to $28.55. The stock is down slightly this month.

Crude's big jump helped stocks of Big Oil (ConocoPhillips (COP, news, msgs) was up 0.5% to $84.34), oil and gas production companies (Anadarko Petroleum (APC, news, msgs) added 1.2% to $69.75) and oil-service companies. Transocean (RIG, news, msgs) was up 0.6% to $159.68.

There was no consensus on how high crude could rise either Tuesday or in the immediate future -- except that it's likely to go higher. Right now, experts are looking at $125 a barrel in the near future.

• MSN Money's Jim Jubak sees crude oil hitting $180 a barrel

As crude moved higher today, there was a parallel rally in coal stocks after Arch Coal (ACI, news, msgs) boosted its guidance for 2008, citing larger-than-expected demand. The stock was up 6.5% to $62.18.

Other coal stocks were also higher. Peabody Energy (BTU, news, msgs) added 3.2% to $68.83 and rose an additional 1.7% to $70 in after-hours trading.

Caterpillar (CAT, news, msgs), the Dow's leader on Friday, was down 2.3% to $83.33 after downgrades by Credit Suisse, Longbow Research and Wachovia Securities. Fourteen of 30 Dow stocks were higher today, along with 193 S&P 500 stocks and 48 Nasdaq-100 ($NDX.X) stocks.

General Motors (GM, news, msgs) was the Dow leader, up 5.7% to $21.27. Investors apparently are bullish on the automaker's expansion plans for China.

Toymaker Hasbro (HAS, news, msgs) was the S&P 500 leader, up 9.8% to $34.65 on better-than-expected first-quarter earnings.

Texas Instruments guidance disappoints

Texas Instruments shares fell 2.5% to $29.83 in after-hours trading after second-quarter guidance on revenue and profits was lower than expected. The stock had closed up 3.3% to $30.59 in regular trading.

First-quarter earnings were in line with analyst estimates.

TI, the world's biggest supplier of chips for cellular telephones, said second-quarter revenue should come in at $3.24 billion to $3.5 billion; Wall Street was looking for upwards of $3.51 billion. In the 2007 second quarter, total revenue was $3.42 billion.

For the first quarter, the company said it earned 49 cents a share from continuing operations, up from 35 cents a year ago. Revenue was up 2.5% from 2007 to $3.27 billion. Wall Street had expected $3.28 billion.

TI had cut guidance in March, citing a softer economic environment. In addition, shares have been pressured lately after two of its biggest customers, LM Ericsson (ERIC, news, msgs) and Nokia (NOK, news, msgs) said they'd planned to buy chips from several suppliers rather than rely almost exclusively on TI.

In addition, Nokia, the Finish cell-phone company, downgraded its forecast for the global handset market and posted lower-than-expected earnings in the first quarter.

Energy prices -- New York close

	Mon.	Fri.	Chg.	Month chg.	YTD chg.
Crude oil (NYMEX) (per barrel)	$117.48	$116.69	$0.79	15.65%	22.40%
Heating oil (per gallon)	$3.3114	$3.2923	$0.0191	8.60%	24.99%
Natural gas (per million BTU)	$10.7330	$10.5870	$0.1460	6.26%	43.43%
Unleaded gasoline (per gallon)	$2.9791	$2.9893	-$0.0102	13.87%	19.60%

Crude tops $117; OPEC won't increase output

Crude oil continued its dismaying string of record moves, closing at $117.48 a barrel in New York, up 79 cents from Friday. So far this year, crude oil is up 22%.

Energy stocks, especially oil-services stocks, were higher. Schlumberger (SLB, news, msgs) was up 5% to $106.91. Driller Smith International (SII, news, msgs) rose 1.4% to $78.01. Hess (HES, news, msgs) jumped nearly 7% to $112.56 and was the fourth-best performer among S&P 500 stocks.

• Video: Fortune's top 500 companies

A big reason for the move higher was a comment from Abdullah el al-Badri , secretary general of the Organization of Petroleum Exporting Countries, who said rising prices have little to do with supply and demand.

"How much higher (oil) will go . . . depends on a number of things: the political situation, whether there is a natural catastrophe, whether there are speculations in the market, whether there are strikes in certain producing countries," al-Badri said at an energy conference over the weekend in Rome. "So there are many other factors other than OPEC production."

One factor today was an attack on a Japanese oil tanker off Yemen in the Gulf of Aden. The tanker, the Takayama, was hit by a "rocketlike weapon" at 4:40 a.m. Yemeni time, according to the Japanese coast guard. None of the 23 crew members was injured.

"There's clearly some geopolitical tension in the market," Mark Pervan, a senior commodity strategist at the ANZ Bank in Melbourne, Australia, told CNNMoney.com "This will die down, but the market is pretty jittery at the moment."

Oil's surge is also partly due to the weak dollar. Crude prices are denominated in dollars and generally rise when the dollar declines.

"Today it's a trader's market," Stephen Schork, editor of the Schork Report, an energy newsletter, told CNBC. Every time traders see weakness in the dollar, they buy crude oil.

"There is plenty of oil," Schork said. The problem is "the lack of ability to refine oil." He said there's no reason for oil prices to be at these levels: "Fair value is $85 to $90 a barrel."

Gas prices jump -- again

Drivers appear to have a long summer ahead of them. Consumers have been slammed by soaring prices at the pump: Gas prices are up 21% from last year. The average price of a gallon of regular unleaded self-serve gasoline rose nearly 16 cents to $3.47 over the weekend, according to the Lundberg Survey.

• Video: Clorox's new green products

The cheapest place to fill up was in Newark, N.J., the survey of 7,000 gas stations said, where prices averaged $3.21 a gallon. San Francisco drivers faced the highest prices, paying $3.88 a gallon.

A separate survey put the average price of regular unleaded gas even higher. The AAA Fuel Gauge report said prices averaged $3.50 a gallon, up 65 cents from last year.

Subprime mess batters Bank of America

Bank of America said it had earned $1.21 billion, or 23 cents per share, down from $5.26 billion, or $1.16 per share, a year ago. Analysts had been expecting earnings of 41 cents per share.

The bank's shares were down 2.5% to $37.61. The decline was the second worst among the 30 Dow stocks after American International Group (AIG, news, msgs), down 3.5% to $46.54.

Bank of America wrote down $1.9 billion on bad mortgage-related securities in the quarter and set aside $6 billion to cover bad loans and credit losses, up from the $3.3 billion it set aside in the fourth quarter.

The bank blamed a weak economy and the credit crunch for a big part of the profit decline. And CEO Ken Lewis said in a statement that the banking giant is concerned about how consumer spending will be affected by a falling housing market, high gas prices and an uncertain job environment.

• Video: Inside Bank of America's earnings

Lewis has said his goal for 2008 was to grow profit by at least 20%.

Though the stock's performance today was hardly an endorsement of the bank's prospects, not everyone was disappointed. "Investors aren't looking for heroics," Nancy Bush, an independent bank analyst in Aiken, S.C., told Bloomberg News. "They want to hear the bank say the end of the pain is near and they don't have to cut the dividend."

National City gets $7 billion capital boost

Beleaguered National City (NCC, news, msgs) is the latest financial institution to get a cash infusion to help keep it afloat.

The regional bank, headquartered in Cleveland, will receive $7 billion from a group of investors led by private-equity firm Corsair Capital. The deal would give Corsair a 9.9% stake in the company.

• Get free, real-time stock quotes on MSN Money

National City shares were off nearly 28% to $6.03 on the day's news, the worst performance of an S&P 500 stock. The news also included a big first-quarter loss and a major cut in its quarterly dividend from 21 cents to 1 cent.

Though the deal will allow the bank to continue to operate, the number of outstanding shares will increase, which will dilute the holdings of existing shareholders. National City will sell 126.2 million common shares for $5 each, nearly 40% below the bank's Friday close of $8.33.

National City also said it lost $171 million, or 27 cents per share, in the first quarter, down from a profit of $319 million, or 50 cents per share, a year ago.

Like so many banking companies, National City has been slammed by the mortgage-market mess. Its stock has plunged nearly 80% over the past year. The bank's troubles have sparked talk of a possible takeover by rival banks such as KeyCorp (KEY, news, msgs) and Fifth Third Bancorp (FITB, news, msgs), but neither has made a bid.

Washington Mutual (WM, news, msgs) and Wachovia (WB, news, msgs) both announced capital injections from outside investors earlier this month.

Drug giants report jump in profit

Drug companies Eli Lilly (LLY, news, msgs) and Merck (MRK, news, msgs) reported first-quarter results this morning.

Eli Lilly said earnings jumped $1.06 billion, or 97 cents per share, more than double the $508.7 million, or 47 cents per share, earned in the same period last year. Excluding gains, however, Lilly earned 92 cents per share, missing The Street's estimate of 96 cents per share.

Revenue rose 14% to $4.81 billion, thanks to strong sales of its antidepressant, Cymbalta, and impotence drug, Cialis.

Lilly shares fell 4.8% to $49.59 this afternoon.

Meanwhile, Dow component Merck said it earned $3.3 million, or $1.52 per share, up 92% from $1.7 million, or 78 cents per share, a year ago. Excluding gains, Merck earned 89 cents per share, 3 cents ahead of analysts' expectations.

• Video: More on Merck

Merck's revenue finished rose 1% to $5.82 billion. Its shares were off 0.3% to $39.63.

Merck also reaffirmed its 2008 guidance for $3.28 to $3.38 per share.

Bank of England's bailout plan

The Bank of England today announced a plan to help ease the mortgage-market mess that has hit the United Kingdom in recent months.

The plan allows banks to temporarily swap mortgage-backed securities for 50 billion pounds ($100 billion) of government bonds in an effort to ease the pressure from the credit crunch that has slammed financial institutions around the globe.

The plan will "unfreeze the situation we've got at the moment," Chancellor of the Exchequer Alistair Darling told the BBC on Sunday. It follows a similar move by the U.S. Federal Reserve last month that provided up to $200 billion to banks in exchange for mortgage-backed securities.

Banks have from today through the next six months to swap assets, the Bank of England said.

Short hits from the markets -- 4 p.m.

	Mon.	Fri.	Chg.	Month chg.	YTD chg.
Treasurys
13-week Treasury bill	1.270%	1.320%	-0.050	-5.93%	-59.55%
5-year Treasury note yield	2.926%	2.948%	-0.022	15.42%	-15.31%
10-year Treasury note yield	3.712%	3.743%	-0.031	7.10%	-8.00%
30-year Treasury bond yield	4.476%	4.517%	-0.041	3.01%	0.38%
Currencies
U.S. Dollar Index	71.880	72.255	-0.375	-0.39%	-6.28%
British pound in dollars	$1.9814	$1.9988	-0.0174	-0.12%	-0.40%
Dollar in British pounds	£0.5047	£0.5003	0.0044	0.12%	0.40%
Euro in dollars	1.5918	1.5828	0.0091	1.07%	8.91%
Dollar in euros	€ 0.6282	€ 0.6318	-0.0036	-1.06%	-8.18%
Dollar in yen	103.27	103.78	-0.51	3.47%	-7.67%
Canadian dollar in U.S. dollars	$0.994	$0.996	-$0.0017	1.66%	0.10%
U.S. dollar in Canadian dollars	$1.007	$1.004	$0.0022	-1.66%	-0.11%
Commodities
Gold	$917.60	$915.20	$2.40	-1.01%	9.50%
Copper	$3.8665	$3.8925	-$0.03	-1.98%	27.15%
Silver	$17.3600	$17.8200	-$0.46	-1.87%	16.35%
Corn	$5.8025	$5.9950	-$0.19	2.29%	27.39%
Crude oil (NYMEX) (per barrel)	$117.48	$116.69	$0.79	6.66%	22.40%