US STOCKS-Wall Street flat near records, focus on earnings

Reuters

* Hasbro rallies after results, McDonald's edges lower

* Netflix, Texas Instruments to report after the close

* September home resales fall, price appreciation slows

* Dow off 0.1 pct, S&P 500 down 0.1 pct, Nasdaq up 0.1 pct

By Ryan Vlastelica

NEW YORK, Oct 21 (Reuters) - U.S. stocks were little changedon Monday as investors looked to corporate earnings to justifycurrent levels, with the S&P 500 near a record.

The Dow was kept in negative territory by McDonald's Corp, which sold off following a weak fourth-quarter outlook,while a rally in Apple Inc supported the Nasdaq.

Though only a small percentage of S&P 500 stocks havereported earnings thus far, the season has been mixed, withrevenue growth especially a concern. Still, profits have largelyrisen and many bellwether companies have topped expectations.

"It's too early to tell if results are strong, and so farthey're not enough to get excited or nervous about," said DavidCarter, chief investment officer at Lenox Wealth Advisors in NewYork.

Early results have suggested that "revenue growth looksmediocre, but valuations remain attractive, so we remainoptimistic about equities."

The S&P 500 on Friday capped its biggest weekly gain inthree months on stronger-than-expected earnings from suchcompanies as Google and Morgan Stanley, as wellas a deal in Washington that averted a possible government debtdefault and reopened the federal government after a 16-dayshutdown. The S&P made a record high.

Apple boosted the S&P and Nasdaq after Societe Generalelifted its price target on the stock to $575 from $500 andadvised clients to buy shares. The stock rose 2.3 percent to$520.82.

McDonald's fell 0.9 percent to $94.35 after it reportedrevenue that missed estimates and warned global October salescould be relatively flat. Hasbro Inc jumped 6.1 percentto a new all-time high as both earnings and sales toppedexpectations.

With 21 percent of S&P companies having reported, 61.5percent have topped profit expectations, a beat rate slightlyabove the historical average. Only 52 percent have topped onrevenue, below the historical average of 61 percent.

The Dow Jones industrial average was down 20.20points, or 0.13 percent, at 15,379.45. The Standard & Poor's 500Index was down 1.78 points, or 0.10 percent, at 1,742.72.The Nasdaq Composite Index was up 4.48 points, or 0.11percent, at 3,918.76.

More than 25 percent of the S&P 500 components are due toreport this week, with Texas Instruments and Netflix among the names slated to come out after the marketcloses.

While Netflix shares have soared this year, few shortsellers are expecting the stock to pull back following itsresults, a sign of how the Federal Reserve's stimulus programhas made successful negative bets hard to execute.

JPMorgan Chase & Co shares edged lower after itreached a tentative $13 billion deal with the U.S. government tosettle investigations into bad mortgage loans sold to investorsby JPMorgan and the banks it bought during the financial crisis.Shares slipped 0.3 percent to $54.13.

"A settlement of this size brings closure for many and itallows them to put the episode behind," said Andre Bakhos,managing director at Janlyn Capital LLC in Bernardsville, NewJersey.

Shares of Tellabs Inc rose 4.9 percent to $2.47after the network services provider agreed to be taken privateby Marlin Equity Partners for $891 million.

The market barely reacted to news that U.S. home resalesfell in September and prices rose at their slowest pace in fivemonths, in the latest signs higher mortgage rates were takingsome edge off the housing market recovery.

Japan's exports rose but were well short of expectations inSeptember, a sign that slowing demand in Asia was taking theshine off Prime Minister Shinzo Abe's stimulus policies andclouding the outlook for a recovery.

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