US STOCKS-Wall St ends flat as investors shrug off China hike

* AIG at 52-week high as new credit facilities arranged

* Volume thin, blizzard hampers transport in Northeast U.S

* China’s central bank raises interest rate

* Stocks: Dow down 0.2 pct; S&P, Nasdaq up 0.1 pct

* For up-to-the-minute market news see [STXNEWS/US]
(Updates with trading volume)

By Angela Moon

NEW YORK, Dec 27 (BestGrowthStock) – Wall Street erased earlier
losses and ended little changed on Monday as investors shrugged
off a surprise weekend interest rate hike from China’s central
bank.

In a quiet day for equities with no major economic data or
corporate news, trading volume, which usually dips during the
holiday season, was even lighter as a blizzard moved across the
northeastern United States.

Financial stocks rose, in part boosted by a rally in
American International Group (AIG.N: ) shares, and helped the S&P
500 cut losses and turn positive in afternoon trade.

“The market is pretty much flat but we ended well off our
lows and although we have no buyers stepping in, we have to
give the bulls the victory seeing how the market turned
around,” said Ryan Detrick, technical analyst at Schaeffer’s
Investment Research at Cincinnati, Ohio.

“Today is an exception but this week is typically
considered the Santa Claus rally time and we expect that to
resume later this week and end the year higher.”

The Dow Jones industrial average (.DJI: ) settled down 20.73
points, or 0.18 percent, at 11,552.76. The Standard & Poor’s
500 Index (.SPX: ) was up 0.74 points, or 0.06 percent, at
1,257.51. The Nasdaq Composite Index (.IXIC: ) was up 4.25
points, or 0.16 percent, at 2,669.85.

Shares of AIG rose as much as nearly 12 percent as
investors applauded the insurer’s move to secure $4.3 billion
in credit facilities. For details, see [ID:nSGE6BQ05G]

The stock ended up 9.3 percent at $59.38. The S&P financial
sector index (.GSPF: ) gained nearly 1 percent.

But retail stocks were hit as the snowstorm on the heavily
populated U.S. East Coast kept many shoppers away from malls
just after Christmas, casting a pall on the final act of the
holiday season. The weekend’s blizzard conditions, which shut
down airports and halted traffic, may also signal an end to
shoppers’ appetite in the next few months. [ID:nN27136773]

The S&P 500 retail index (.RLX: ) fell 0.3 percent,
underperforming the wider market.

Among retailers, Nordstrom Inc (JWN.N: ) shares fell 1.6
percent to $42.09 and RadioShack (RSH.N: ) was down 0.1 percent
at $18.47.

The CBOE Volatility Index (.VIX: ) jumped 7.3 percent to
17.67, only one session after closing at its lowest levels
since July 2007.

The VIX “is beginning to price in the possibility of more
volatile trading in early 2011,” said Fred Ruffy, options
strategist at WhatsTrading.com.

The VIX measures projected stock market volatility off of
near-term S&P 500 index option prices and often moves inversely
to the benchmark S&P.

China’s central bank raised interest rates on Saturday for
the second time in just over two months as it stepped up its
battle to rein in stubbornly high inflation. The People’s Bank
of China said it will raise the benchmark lending rate by 25
basis points to 5.81 percent and lift the benchmark deposit
rate by 25 basis points to 2.75 percent. [ID:nTOE6BO010]

About 2 billion shares traded on the New York Stock
Exchange, compared to the daily average of about 4.8 billion
shares this year.

Trading in the options market was also thin, with 3.7
million calls and 2.6 million puts traded, or about half the
daily average.

Advancing stocks slightly outnumbered advancing ones on the
NYSE by 1,582 to 1,312, while on the Nasdaq, advancers beat
decliners 1,483 to 1,114.

US STOCKS-Wall St ends flat as investors shrug off China hike