US STOCKS-Market flat as earnings fears temper credit hopes

(Updates with Alcoa, Advanced Micro Devices results)

By Kevin Plumberg

NEW YORK, April 7 (Reuters) - U.S. stocks were little changed on Monday as rising oil prices stoked fears that corporate profits will suffer, overshadowing optimism the credit crisis is easing on news that Washington Mutual Inc was close to securing a $5 billion investment.

Alcoa Inc (AA.N: Quote, Profile, Research) was the biggest drag on the Dow on Monday as investors shifted their focus to the first-quarter earnings reporting period. After the bell, Alcoa said its first-quarter profit was halved from a year ago because of energy costs and the weak dollar, but shares of the aluminum producer edged up, largely on expectations for higher metal prices.

Advanced Micro Devices (AMD.N: Quote, Profile, Research), however, darkened the mood after the bell, saying it will cut 10 percent of its work force after first-quarter sales fell more than it had expected. Shares of AMD, the second largest maker of computer processors, fell 2.7 percent to $6.17 in extended trading, more than giving up gains of 1.8 percent in regular trading.

Other industrial shares also declined as oil prices rose to within striking distance of a new record as several refineries prepared for the U.S. summer driving season, boosting supply concerns. General Electric (GE.N: Quote, Profile, Research) was the top drag on the S&P, shedding 0.8 percent to $37.26.

Major stock indexes were higher for most on the day, boosted by the financial sector on news that Washington Mutual (WM.N: Quote, Profile, Research) is close to securing a capital injection, feeding investor hopes the worst of credit crisis is over.

"Those assumptions will face a reality check as companies report first-quarter earnings over coming weeks beginning tonight with Alcoa and as you get second quarter guidance," said Jim Awad, chairman of W.P. Stewart & Co. Ltd. in New York.

The Dow Jones industrial average .DJI was up 3.01 points, or 0.02 percent, ending at 12,612.43. The Standard & Poor's 500 Index .SPX was up 2.12 points, or 0.15 percent, finishing at 1,372.52. The Nasdaq Composite Index .IXIC was down 6.15 points, or 0.26 percent, at 2,364.83.