US STOCKS-Wall St flat, investors chase commodity stocks

* Investors bullish about earnings, but volume seen weak

* Rise in commodity prices lifts energy shares

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

* Indexes down: Dow 0.04 pct, Nasdaq 0.06, S&P 0.01 pct

* For up-to-the-minute market news see [STXNEWS/US]
(Updates to early afternoon)

By Edward Krudy

NEW YORK, April 8 (Reuters) – Higher commodity prices drove
a bid for materials and energy stocks in an otherwise
lackluster session on Friday, ahead of the start of the
corporate earnings season, seen as the next catalyst to drive
stocks higher.

Stocks have traded in a tight range, running into
resistance at elevated levels this week. Volume has been low as
investors hold off making big bets before companies report
their quarterly results.

A fall in the dollar, pressured by expectations of more
rate hikes in the euro zone, as well as hopes for strong
demand, helped lift oil and metal prices.

Chevron Corp (CVX.N: Quote, Profile, Research), up 0.9 percent to $109.65, was the
biggest boost to the Dow industrials. Among miners Freeport
McMoRan Copper & Gold (FCX.N: Quote, Profile, Research) rose 1.2 percent to $58.10

“The weaker dollar has given an impetus for pushing deep
into the commodities,” said Quincy Krosby, market strategist at
Prudential Financial in Newark, New Jersey. Krosby said the
sector was seeing “extra gains from speculation.”

The Dow Jones industrial average (.DJI: Quote, Profile, Research) dropped 5.14
points, or 0.04 percent, to 12,404.35. The Standard & Poor’s
500 Index (.SPX: Quote, Profile, Research) fell 0.15 points, or 0.01 percent, to
1,333.36. The Nasdaq Composite Index (.IXIC: Quote, Profile, Research) lost 1.77 points,
or 0.06 percent, to 2,794.37.

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.

Volumes recently have been among the lowest of the year as
investors wait to see how corporations are faring in an
environment with overseas headwinds but also signs of economic
recovery.

Bullishness has risen to levels not seen since last
December ahead of earnings, according to a survey by Investors
Intelligence, but Prudential’s Krosby says results are not a
done deal and 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.”

The S&P is nearing resistance around 1,345, near its 2011
high, and many analysts believe earnings could be the catalyst
that pushes the market through that.

“Most people are very bullish and focused on earnings
season, which should see solid growth, especially in
financials, technology and commodities,” said Paul Brigandi,
vice president of trading at Direxion Funds in New York.

Brent crude climbed to a 32-month high and was at $125.90 a
barrel on concerns of long-term supply cuts in Libya.
Occidental Petroleum Corp (OXY.N: Quote, Profile, Research) rose 2.3 percent to $103.48,
and the S&P Energy index (.GSPE: Quote, Profile, Research) rose 0.7 percent.
[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
2.7 percent. [ID:nL3E7F80GG]

The euro rose to a 15-month high against the dollar. The
prospect of a U.S. government shutdown helped pushed the dollar
lower as well as expectations of rising interest rates in
Europe.

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. “When will the White House and when
will Senate Democrats get serious about cutting spending?”
House Speaker John Boehner, a Republican, said on Friday.
[ID:nN08144565]

Shares of Seagate Technology Plc (STX.O: Quote, Profile, Research) climbed 8.7
percent to $15.97 a day after it reinstated its dividend and
said it expects third-quarter revenue and margins to come in at
the higher end of its previous guidance. [ID:nL3E7F73QV]
(Editing by Leslie Adler)

US STOCKS-Wall St flat, investors chase commodity stocks