* Manufacturers, financials down as U.S assets sell off
* Weaker dollar boosts multinationals, commodity firms
* Dow down 0.2 pct; S&P off 0.2 pct, Nasdaq off 0.2 pct
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(Updates with Exxon Mobil, oil prices in new paragraphs
11-12)
By Edward Krudy
NEW YORK, May 22 (Reuters) - U.S. stocks fell for a fourth
day on Friday on persistent worries about the U.S. budget
deficit, with U.S. Treasuries and the dollar losing ground.
Shares of big manufacturers such as Caterpillar Inc
<CAT.N>, down 3.5 percent at $34.31, and financials such as
Bank of America <BAC.N>, down 3 percent at $11.07, led the
decline. Investors have reduced positions in U.S. assets due
to concerns about the country's debt.
However, multinationals and commodity companies limited
the major U.S. stock indexes' losses as investors bought
stocks in sectors that could benefit from the weaker dollar,
while energy shares climbed on bets overseas demand would
support energy prices.
McDonald's Corp <MCD.N>, the largest fast-food restaurant
chain, shot up 2.5 percent to $57.08 and provided the biggest
boost to the Dow Jones industrial average.
Shares of gold producer Newmont Mining Corp <NEM.N> rose
0.9 percent to $47.04.
Gold, a traditional safe haven, hit a fresh two-month
high, rising above $960 an ounce for the first time since late
March, while the Chicago Board Options Exchange Volatility
Index <.VIX>, also known as Wall Street's fear gauge, climbed
4.1 percent and remained well above 30, a key psychological
level, according to analysts.
"Investors are coming to a realization that interest rates
are heading higher and the dollar is going to be under
pressure," said Alan Lancz, president of Alan B. Lancz &
Associates Inc, an investment advisory firm based in Toledo,
Ohio.
"Energy is moving as China continues to stockpile and buy
all the commodities they can. I think you have that play of a
weaker dollar and stronger commodities right now.
Multinationals are going to be big plays -- anybody doing
anything overseas" will attract attention, he added.
The Dow Jones industrial average <> dropped 14.81
points, or 0.18 percent, to 8,277.32. The Standard & Poor's
500 Index <.SPX> fell 1.33 points, or 0.15 percent, to 887.00.
The Nasdaq Composite Index <> lost 3.24 points, or 0.19
percent, to 1,692.01.
INDEXES FINISH WEEK WITH GAINS
For the week, though, stocks finished moderately higher,
with the blue-chip Dow average up 0.1 percent, the S&P 500 up
0.5 percent and the Nasdaq up 0.7 percent.
Shares of Exxon Mobil Corp <XOM.N> climbed 0.6 percent to
$68.83, supported by oil prices continuing to rise above $61
per barrel.
U.S. front-month crude futures <CLc1> rose 62 cents, or
1.02 percent, to settle at $61.67 a barrel on the New York
Mercantile Exchange.
On Nasdaq, big-cap technology shares led the index lower.
Apple Inc <AAPL.O> fell 1.4 percent to $122.50 and Qualcomm
Inc <QCOM.O> slid 0.9 percent to $41.31.
Ratings agency Standard & Poor's rattled markets on
Thursday when it said it might cut Britain's AAA credit rating
because of the danger of soaring public debt, sparking fears
of a similar action against the United States.
With the long Memorial Day holiday weekend approaching,
volume was light on the New York Stock Exchange, adding to the
session's volatility. U.S. financial markets will be closed on
Monday for the holiday.
On the New York Stock Exchange, about 1.06 billion shares
changed hands, sharply below last year's daily average of 1.49
billion. On the Nasdaq, about 1.62 billion shares traded, also
well below last year's daily average of 2.28 billion.
Although both the Dow and the S&P 500 ended Friday's
session slightly lower, the market's breadth was moderately
positive. On the NYSE, there were 1,524 advancers and 1,458
decliners. On the Nasdaq, though, the opposite was true, with
1,458 stocks declining and 1,185 stocks advancing.
(Additional reporting by Ellis Mnyandu; Editing by Jan
Paschal)
