September 15, 2009 / 2:53 PM / in 8 years

US STOCKS-Wall St flat after weak earnings, strong data

* Retail sales, PPI data better than expected

* Best Buy, Kroger Q2 earnings miss estimates

(Updates to midmorning)

By Chuck Mikolajczak

NEW YORK, Sept 15 (Reuters) - U.S. stocks were little changed on Tuesday after disappointing earnings from electronics retailer Best Buy (BBY.N) and supermarket chain Kroger (KR.N) and stronger-than-expected retail sales and producer price data failed to move investors.

August retail sales jumped 2.7 percent, topping economists’ expectations of a 2.0 percent rise. Excluding autos, sales rose 1.1 percent versus the estimate of an 0.4 percent increase. [ID:nN15548319]

The August producer price index (PPI) gained 1.7 percent, due to the biggest climb in gasoline prices in 10 years, while economists looked for an 0.8 percent increase. Excluding volatile food and energy items, the PPI rose 0.2 percent, compared with the estimate of a 0.1 percent increase.

An uptick in consumer spending is seen as crucial for any economic recovery to continue.

Best Buy Co Inc reported second-quarter earnings that were shy of estimates, although the company raised its full-year outlook. The stock slipped 2.3 percent to $39.50. [ID:nBNG480205]

Kroger Co slid 8 percent to $20.31 after posting second-quarter profit below estimates and trimmed its full-year outlook. [ID:nN15548566]

On the anniversary of the collapse of Lehman Brothers LEHM.PK, the U.S. Treasury Department is still dealing with the fallout of the financial crisis. For details, see [ID:nLEHMAN]

“It’s a little bit of conflicting things going on. Best Buy misses the quarter but raises guidance, suggesting things are getting better the second half of the year. Then Kroger comes out and lays an egg,” said Kevin Kruszenski, head of listed trading at KeyBanc Capital Markets in Cleveland.

“It’s still a minefield out there.”

The Dow Jones industrial average .DJI dropped 5.89 points, or 0.06 percent, to 9,620.91. The Standard & Poor’s 500 Index .SPX shed 1.58 points, or 0.15 percent, to 1,047.76. The Nasdaq Composite Index .IXIC gained 2.74 points, or 0.13 percent, to 2,094.52.

The government is in talks with Citigroup Inc (C.N) about selling the roughly one-third stake it acquired as part of its bailout of the company, Bloomberg reported, citing people familiar with the matter. Citi shares were down 5.1 percent to $4.29. [ID:nN14524209].

EBay Inc (EBAY.O) added 1.5 percent to $24.17 after Piper Jaffray upgraded shares of the online auctioneer to “overweight” from “underweight,” based on its quarterly eCommerce survey.

MasterCard Inc’s (MA.N) chief financial officer said the volume of processed transactions fell 8 percent in July and August in the United States. MasterCard shares gained 1 percent to $209.78. [ID:nN15546192]

A government report showed U.S. business inventories fell 1 percent in July, pushing the dollar amount to its lowest level since March 2006. [ID:nN14414891]

Reporting by Chuck Mikolajczak; editing by Jeffrey Benkoe

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