* Stocks flat as lower oil offset by Fedex outlook
* Financials top gaining sector after HSBC profit rise
* Firmer dollar also significant supporting factor
(Updates to early morning)
By Kristina Cooke
NEW YORK, May 12 (Reuters) - U.S. stocks were little
changed on Monday as the dollar's rise helped to push oil
prices lower, but gains were offset after Fedex Corp <FDX.N>, a
package delivery company seen as a barometer of economic
activity, slashed its earnings forecast.
Oil prices slipped from record highs set last week as the
dollar approached a two-month peak. With crude priced in the
U.S. currency, the dollar's recent weakness had helped to fuel
oil's record-setting climb.
Stocks also received a boost after Citigroup raised its
price target on Wal-Mart Stores Inc <WMT.N>, the world's
largest retailer.
But Fedex, citing higher energy prices and a drop in demand
caused by the weak economy, lowered its earnings forecast late
on Friday, sending its shares down 1.5 percent to
$89.01.
" Financials are decent. Oil coming down is a good thing,
as is the strong dollar," said Joe Saluzzi, co-manager of
trading at Themis Trading in Chatham, New Jersey. "But I'm on
the fence here, it's early in the session and the gains feel
muted."
The Dow Jones industrial average <> was up 26.78
points, or 0.21 percent, at 12,772.66. The Standard & Poor's
500 Index <.SPX> gained 1.57 points, or 0.11 percent, to
1,389.85. The Nasdaq Composite Index <> was up 4.13
points, or 0.17 percent, at 2,449.65.
Financial shares were the top gaining sector, after
stronger-than-expected first-quarter results from HSBC
<HSBA.L>, Europe's largest bank, eased concerns about the
banking sector. HSBC said growth in Asia and elsewhere helped
counter a hit from its exposure to U.S. home loans.
Wal-Mart rose 1.2 percent to $57.86 after Citigroup raised
its price target for Wal-Mart, saying international growth
should help offset weakness in the United States.
Technology shares were helped by gains in Research In
Motion <RIM.TO><RIMM.O>, which rose 3.7 percent to $137.50 on
optimism about its new BlackBerry Bold smartphone.
The dollar rose 1 percent against the yen and approached a
two-month high versus a basket of currencies, boosted by a
slight rise in risk demand and growing speculation that U.S.
interest rate cuts may be ending.
The price of crude <CLc1> fell 80 cents to $125.18 a
barrel. Oil's record-setting run has been fueling concerns
about inflation and high gasoline prices that could cut into
consumers' disposable income.
Shares of Sprint Nextel Corp <S.N> fell 1.6 percent to
$9.52 after the No. 3 U.S. mobile phone company reported a
wider quarterly loss amid steep customer defections. It
forecast only marginal improvements in the current quarter.
Investors were also keeping a close eye on news of a major
earthquake that shook China's Sichuan province. Up to several
thousand people were killed, the official Xinhua news agency
said, citing the central government.
"It is oddly quiet, given there's been a major disaster in
China. I don't think people really understand yet what's going
on over there and how it could affect the stock market,"
Saluzzi said.
(Editing by Kenneth Barry)
