US STOCKS-Wall St falls, weighed by transport stocks

* U.S. crude ends above $112, highest in 30 months

* Investors bullish about earnings, but volume seen weak

* Still no agreement on U.S. budget, midnight deadline

* Indexes down: Dow 0.6 pct, S&P 0.6 pct, Nasdaq 0.7 pct

* For up-to-the-minute market news see [STXNEWS/US]
(Updates to late afternoon; changes byline)

By Angela Moon

NEW YORK, April 8 (Reuters) – Wall Street stocks fell on
Friday as a spike in oil prices hit shares of airlines and
other transportation companies and investors took a cautious
stance before the weekend.

Low trading volume also suggested investors were holding
off major new bets until they see early quarterly earnings
beginning next week.

The S&P 500 was on track to end a quiet week slightly
lower. Volume was similar to last week’s, which was the
lightest of the year as investors weighed the impact of
overseas headwinds and signs of U.S. economic recovery.

U.S. crude oil futures (CLc1: Quote, Profile, Research) settled at $112.79 a barrel,
up 2.3 percent and the highest since September 2008.

The Arca airline index (.XAL: Quote, Profile, Research) shed 3 percent and the Dow
Jones Transportation Average (.DJT: Quote, Profile, Research) fell 1.9 percent.

The S&P faces resistance around 1,345, near its 2011 high.
Many analysts believe earnings could be the catalyst that
pushes the benchmark index through that resistance.

“If the earnings next week are robust enough, we might go
above 1,350, which is the top of the trading range. But since
the market is very complacent, we might easily turn the other
way if we see a negative outlook,” said James Meyer, chief
investment officer at Tower Bridge Advisors in West
Conshohocken, Pennsylvania.

The Dow Jones industrial average (.DJI: Quote, Profile, Research) was down 71.25
points, or 0.57 percent, at 12,338.24. The Standard & Poor’s
500 Index (.SPX: Quote, Profile, Research) was down 8.31 points, or 0.62 percent, at
1,325.20. The Nasdaq Composite Index (.IXIC: Quote, Profile, Research) was down 20.20
points, or 0.72 percent, at 2,775.94.

The earnings season will begin unofficially with Alcoa Inc
(AA.N: Quote, Profile, Research), the first Dow component to release results after the
market’s close on Monday. JPMorgan Chase & Co (JPM.N: Quote, Profile, Research) and
Google Inc (GOOG.O: Quote, Profile, Research) are due to report later in the week.

Bullishness has risen to levels not seen since last
December before earnings, according to a survey by Investors

Quincy Krosby, market strategist at Prudential Financial
in Newark, New Jersey, said corporate outlooks will be key,
given the rising cost of raw materials.

“There is a gnawing sense that perhaps the U.S. economy may
be losing some of the momentum that we saw in the first
quarter,” she said. “What you want to hear is whether or not
these companies can pass along these costs.”

Occidental Petroleum Corp (OXY.N: Quote, Profile, Research) rose 2 percent to
$103.20, and the S&P Energy index (.GSPE: Quote, Profile, Research) was flat but
outperformed other sectors. [ID:nL3E7F80GG]

Copper (CMCU3: Quote, Profile, Research) rose 2.1 percent while gold hit record highs
on Friday and silver reached its strongest level since early
1980. U.S.-listed shares of miner Rio Tinto Plc (RIO.N: Quote, Profile, Research) rose
1.5 percent. [ID:nL3E7F80GG]

The White House and Congress faced a midnight deadline to
break a budget deadlock. Democratic and Republican leaders said
there was still no overall deal on government funding for the
rest of the fiscal year. [ID:nN08144565]
(Reporting by Angela Moon, Editing by Kenneth Barry)

US STOCKS-Wall St falls, weighed by transport stocks