NEW YORK (Reuters) – Stocks trimmed losses to end little changed on Friday, as investors saw dips in the market as an opportunity to buy into what has been a strong first month of 2012.

The Dow posted its first weekly loss this year, hurt Friday as Chevron Corp (CVX.N) announced earnings that were below Wall Street's estimates and Procter & Gamble Co (PG.N) cut its full-year profit forecast because of the strong dollar.

But the emergence of late-day buyers was viewed positively as major averages have methodically climbed through January. This week's news that the Federal Reserve intends to keep interest rates low through late 2014 added a jolt of demand that could extend the rally.

"Investors are almost welcoming these little dips, jumping in when they can to join this rally. At this point, they are rationalizing anything they can to get in," said James Dailey at TEAM Financial Management LLC in Harrisburg, Pennsylvania.

"Cautious bulls are no longer cautious after the Fed announcement this week."

Chevron, the No. 2 U.S. oil company, fell 2.5 percent to $103.96 and was the biggest drag on the Dow.

The Commerce Department said U.S. gross domestic product expanded at its fastest pace in 1-1/2 years in the last quarter of 2011, but the 2.8 percent rise fell short of expectations.

Inventory building accounted for much of the growth, and weak spending by businesses in the GDP report pointed to a slower pace of recovery early this year, denting recent optimism about the economy.

In company news, Facebook plans to file documents as early as Wednesday for a highly anticipated initial public offering that will value the world's largest social network at between $75 billion and $100 billion, according to the Wall Street Journal, which cited unidentified sources.

The Dow Jones industrial average (.DJI) was down 74.17 points, or 0.58 percent, at 12,660.46. The Standard & Poor's 500 Index (.SPX) was down 2.11 points, or 0.16 percent, at 1,316.32. The Nasdaq Composite Index (.IXIC) was up 11.27 points, or 0.40 percent, at 2,816.55.

For the week, the Dow fell 0.5 percent, the S&P was up 0.1 percent and the Nasdaq rose 1.1 percent.

Friday's losses were limited as U.S. Federal Reserve statements this week and economic data kept investors alert for the possibility of another round of monetary stimulus known as quantitative easing, or QE3.

"Out of what the Fed said, you can expect some negative numbers because the Fed obviously saw what the GDP numbers are and they anticipate a slowdown," said Sean Kraus, chief investment officer at CitizensTrust in Pasadena, California.

If the Fed does resort to QE3 to stimulate growth, investors "don't want to be caught flat-footed and be out of risky assets," Kraus said.

Consumer product company Procter & Gamble dipped 0.8 percent to $64.30.

Ford Motor Co (F.N) shares fell 4.2 percent to $12.21 after the carmaker reported a lower-than-expected fourth-quarter profit on higher commodity costs and losses in Europe and Asia.

Network equipment makers Juniper Networks Inc (JNPR.N) and Riverbed Technologies Inc (RVBD.O) gave first-quarter outlooks after the close Thursday that were below expectations. Juniper fell 3 percent to $21.69 while Riverbed slid 18.3 percent to $24.45.

According to Thomson Reuters data, 59 percent of 184 S&P 500 companies reporting earnings through Friday have topped analysts' estimates, below the beat rate of about 70 percent seen at this stage of earnings season in recent quarters.

Utilities were the worst performing among S&P sectors after results from American Electric Power Co Inc (AEP.N) and Dominion Resources (D.N). American Electric was off 3.2 percent to $39.95, while Dominion fell 2.5 percent to $49.56. The S&P utilities index (.GSPU) fell 1.3 percent.

Eastman Chemical Co (EMN.N) offered to buy specialty chemical maker Solutia Inc (SOA.N) for about $3.38 billion in cash and stock to extend its reach in emerging markets, particularly the Asia-Pacific region. Solutia shares jumped about 41.1 percent to $27.52 and Eastman shares gained 7 percent to $50.41.

Negotiations between Greece and its private creditors on a debt swap deal made progress on Friday and will continue over the weekend, a senior Greek government official said. Renewed concern about the crisis has troubled markets this week.

About 6.6 billion shares exchanged hands on the New York Stock Exchange, NYSE Amex and Nasdaq on Tuesday.

(Reporting By Angela Moon; Editing by Kenneth Barry)

NEW YORK – When companies buy their own shares, they usually tout it as a benefit to shareholders.

The logic behind that is simple. If companies are buying, they must believe the share price is going to rise. Their confidence influences investors to bid the shares higher. Investors get higher returns and own more of the company because there are fewer shares circulating. And the company can later reissue shares at a higher price. Everyone ends up happy.

In fact, there’s little evidence that buybacks increase share prices over the long term. Companies tend to buy when they believe their stock is undervalued. But while there might be an initial gain when a buyback is announced, the share price usually declines in the following years. That’s because the underlying reasons that the stock was depressed haven’t gone away. Repurchases also don’t lower share count for very long because companies keep reissuing stock to pay employees or make acquisitions.

“Media and analysts talk about buybacks like they’re a great thing,” says James Early, a senior analyst at Motley Fool. “But they’re just as often a raw deal for shareholders.”

Companies usually buy their stock like most investors, on the open market. Buybacks are on the rise this year after slowing during the financial crisis. Best Buy Co., Wal-Mart Stores Inc., IBM Corp. and JPMorgan Chase & Co., were among the 447 companies that announced $285 billion worth of buybacks this year through June 24, according to research firm Birinyi Associates. That’s more than seven times the $38 billion in the comparable period in 2009, when stock prices were depressed, but still below the $404 billion announced the same stretch in 2007.

Why the rush to repurchase? Many recession-weary companies are loath to make long-term commitments like hiring new employees or expanding operations or product lines. Companies are generating significant cash flow because they’ve cut costs. But they aren’t seeing enough of an increase in demand for their goods or services to justify expansion.

Buybacks are one easy way for companies to spend the cash they’ve hoarded, analysts say. There’s also no requirement that a company follow through and buy shares after announcing a buyback plan, says Rob Leiphart, an analyst at Birinyi, which has tracked buybacks since the 1980s. If a company backs out of a repurchase, it will often go unnoticed.

Early on, a buyback can cause a stock to rise. TrimTabs Investment Research estimates that companies that announce buybacks outperform the market by 0.7 percent the next day, and by 1.2 percent in the first 100 days. But Leiphart says companies in the S&P 500 that did not announce a repurchase in 2010 did better than those that did. The stocks of companies that did not announce buybacks rose by three percentage points more, on average, than those that did.

One reason the gains don’t last: Companies tend to repurchase shares when they are confident, have extra cash and think their stock price is low. But if a company has limited growth prospects, faces low future demand for its product or there are price pressures in the industry, its stock will likely fall.

In some cases, buyback announcements are used to distract investors from bad news released around the same time, says Howard Silverblatt, senior index analyst at the S&P. The stock might have declined after negative news but then jumped after a buyback was announced

That won’t fool investors for long.

“If you’re using buybacks to hold up your stock, that’s a holding pattern short term,” says Silverbatt.

One example: Three days before it announced a buyback in May, Tyson Foods Inc. reported flat net income and warned about price increases in one of its biggest expenses, feed. Its stock fell 6 percent. Then the day Tyson announced the share buyback, its stock rose 4.6 percent — not enough to make up for the losses from the bad news. Tyson’s chief financial officer Dennis Leatherby said the company is using its cash to pay down debt and reinvest in its businesses. He defended the stock repurchases as “an appropriate use of our excess cash and strong liquidity.”

The argument that buybacks help drive per-share earnings higher is also flawed. When companies buy their own stock, they typically retire those shares. Fewer outstanding shares should boost earnings per share, a widely used measure for valuing stocks.

But companies are constantly giving out stock options or issuing stock to raise money or buy another company, so share count often ends up holding steady or rising, explains Michael Mauboussin, chief investment strategist at Legg Mason Capital Markets.

Oil giant Exxon Mobil Corp. spent more than $16 billion to buy 230 million shares during the 12 months that ended in March, according to data compiled by FactSet. That alone would reduce share count by 5 percent. But Exxon’s share count actually increased 5 percent above pre-buyback levels over that period, to 4.93 billion, after the company issued 460 million shares for its purchase of XTO Energy.

S&P’s Silverblatt says that only 94 of the 305 S&P 500 companies that bought back shares in the first quarter actually decreased their share count by at least 1 percent over the quarter. Share count actually increased by 1 percent or more at 65 of those companies.

Sara Senatore, an analyst with Sanford C. Bernstein, says that buybacks can be a good idea if the money can’t be put to better uses, like reducing debt or investing in new equipment. Buybacks can also be smart if the stock is truly undervalued, she says. That isn’t always easy to predict.

In 2009 when share prices were obviously cheap, companies made fewer buybacks to conserve cash. In 2007, $863 billion in buybacks were announced, nearly seven times more than in 2009, according to Birinyi.

Senatore says Chipotle Mexican Grill Inc. is one of the few companies that got it right. The burrito maker began buying shares when they were trading around $40. The stock now trades at about $315. From the fourth quarter of 2008 through the first quarter of 2011, Chipotle spent $244 million, including fees, to buy back about 2.9 million shares.

At today’s prices, those shares are worth more than $913.5 million. That’s a lot of burritos.

NEW YORK (Reuters) – U.S. stocks extended gains on Thursday after trade data showed record U.S. exports, easing concerns about a stalled economic recovery following a six-day slide that left the equities market oversold.

Various economists said the spike in exports in April could prompt upward revisions of gross domestic product growth in the second quarter.

“You’re seeing exports picking up pretty dramatically, a positive data point, and a market that had gone down six days in a row,” said Eric Kuby, chief investment officer of North Star Investment Management Corp in Chicago, in reference to the report showing narrower U.S. trade deficit for April.

“You finally have a day with a reason for people to start buying stocks again. The appetite has come back.”

The S&P 500 fell the last six days and was down more than 6 percent from a peak in early May, while the Nasdaq Composite had nearly erased its gains for the year so far.

“For a while, people have been waiting for an entry point,” Kuby said. “Some market participants are saying, ‘We’ve got this pullback. Let’s get invested.’”

The link to the Japanese earthquake in the trade data, which showed a drop in imports from Japan, also backs up widespread opinion that the economy’s recent soft patch is only temporary and not pointing to a dip back into recession in the United States.

S&P sectors most linked to a growing economy led the market higher, with a materials index (.GSPM) up 2.1 percent and an energy index (.GSPE) up 1.3 percent. The Morgan Stanley cyclical index (.CYC), which is down more than 5 percent in June, rose 1.2 percent on Thursday.

The Dow Jones industrial average (.DJI) gained 118.63 points, or 0.98 percent, to 12,167.57. The Standard & Poor’s 500 Index (.SPX) added 12.64 points, or 0.99 percent, to 1,292.20. The Nasdaq Composite Index (.IXIC) rose 15.41 points, or 0.58 percent, to 2,690.79.

The mood remained fragile despite the rebound, with some analysts still expecting the S&P 500 to retest its March low after a string of data, including the latest payrolls report, provided little room for optimism.

“A test of 1,250 is pretty likely in the next couple of weeks,” said John Canally, an investment strategist and economist for LPL Financial in Boston. “We do think it’s going to hold, unless we get another round of bad news from Europe. Data from May is going to look weak, but earnings estimates are still relatively unchanged.”

The PHLX semiconductor index (.SOX) bounced off its 200-day moving average and was holding above 410, a key level that gave strong support in March. It was up 0.6 percent on Thursday.

“It’s telling you that these supply-chain disruptions in Japan may be ebbing, and once that happens, business can tick up again,” LPL’s Canally said. “Demand is still out there. Consumers just couldn’t get what they wanted.”

Texas Instruments Inc (TXN.N) shares rose 1 percent to $32.99 even after the company cut its earnings and revenue forecasts late on Wednesday. The company blamed the shortfall on major client Nokia’s ailing cellphone business.

Reflecting the appetite for tech stocks, shares of Fusion-io (FIO.N) surged 21.6 percent to $23.10 in their first day of trading — up from an initial public offering price of $19. Earlier, the stock was up as much as 34.2 percent at a session high of $25.50. The Salt Lake City, Utah-based company makes storage memory hardware and software for data centers.

But shares of China-based Taomee Holdings Ltd (TAOM.N) fell 4.8 percent to $8.57 in their stock market debut as U.S.-listed Chinese companies come under more scrutiny following a series of accounting scandals. U.S. regulators, brokers and investors are sharpening their look at Chinese companies.

Details of Thursday’s economic data showed the U.S. trade deficit narrowed unexpectedly in April as U.S. exports rose to a record and imports from Japan tumbled more than 25 percent.

A separate report showed the number of Americans filing new claims for unemployment benefits rose by 1,000 last week, while continued claims fell more than expected.

(Reporting by Rodrigo Campos; Additional reporting by Clare Baldwin; Editing by Jan Paschal)

(This story is corrected in the 10th paragraph to say the low referenced is from March 2011, not 2010)

DAEGU, South Korea (Reuters) – Billionaire investor Warren Buffett believes Japan’s devastating earthquake is the kind of extraordinary event that creates a buying opportunity for shares in Japanese companies.

Japan, the world’s third-largest economy, has been battling to bring an overheating nuclear plant under control after it was battered by the March 11 earthquake and tsunami that rattled global markets and prompted massive intervention in currency markets by the Group of Seven industrial nations.

“It will take some time to rebuild, but it will not change the economic future of Japan,” Buffett said on Monday on a visit to a South Korean factory run by a company owned by one of his funds. “If I owned Japanese stocks, I would certainly not be selling them.

“Frequently, something out of the blue like this, an extraordinary event, really creates a buying opportunity. I have seen that happen in the United States, I have seen that happen around the world. I don’t think Japan will be an exception,” said the 80-year-old investor, dubbed the “Sage of Omaha” for his successful long-term investment strategy.

Buffett heads Berkshire Hathaway Inc, which has substantial insurance and utility investments globally.

Japan’s Nikkei share average rose 2.7 percent on Friday, buoyed by the G7 support, but still ended the week down around 10 percent, with some $350 billion wiped off share values — the market’s biggest weekly slide since the global financial crisis in 2008. Japanese markets were closed on Monday.

Buffett said Berkshire Hathaway, which at the year-end was sitting on $38 billion of cash equivalent and last week bought U.S. specialty chemicals maker Lubrizol for $9 billion, was looking for more large-scale acquisitions anywhere in the world.

In his annual letter to Berkshire Hathaway shareholders last month, Buffett had said he was looking for more acquisitions.

“The United States is most likely where we will do something,” he said at a ground-breaking ceremony for a South Korean factory run by a unit of an Israeli firm owned by his investment vehicle.

Buffett will have yet more money to invest after Goldman Sachs buys back $5 billion of its preferred stock from Berkshire Hathaway, which the fund bought at the height of the global financial crisis.

EYE ON KOREA

Buffett, ranked the world’s third-richest man by Forbes this year, said he was also looking to buy entire businesses and large-cap shares in South Korea — where Berkshire is already a leading shareholder in steelmaker POSCO.

He said geopolitical risks associated with North Korea had not curbed his interest in South Korea, Asia’s fourth-largest economy. Berkshire also owns a stake in Chinese car and battery maker BYD.

Buffett did not disclose any holdings in Japan on Monday, and Berkshire Hathaway’s annual report did not show any major investments there. He had been due to visit Japan later this week, but canceled due to the earthquake.

Unlike many foreign fund managers, Buffett, who arrived in the southeastern city of Daegu on Sunday by private jet, won plaudits from ordinary South Koreans.

Sporting gray sweat pants and running shoes, Buffett was greeted by signs reading “Mr Buffett: Daegu Loves You.”

Many in this country of nearly 50 million people have bad memories of the 1998 Asian financial crisis when a deal with the International Monetary Fund bailed out the country but at the cost of tens of thousands of jobs.

Some U.S. hedge funds have been branded “vultures” for buying South Korean assets on the cheap in the wake of that crisis.

“It’s a once in a life-time opportunity. I’m honored to meet such a respected businessman,” said Seo Hyun-joo, a housewife wearing Korean traditional dress.

Buffett later meets South Korean President Lee Myung-bak in Seoul and heads to India on Tuesday to launch his firm’s insurance selling portal.

(Reporting by Hyunjoo Jin; Editing by David Chance and Ian Geoghegan)