Wall St flat as Boeing offset by bargain hunting

By Rodrigo Campos

NEW YORK (Reuters) - U.S. stocks were little changed on Tuesday as a delay in Boeing's first test flight of the 787 Dreamliner was offset by investors' search for bargains following Wall Street's worst day in two months.

Boeing Co, the Dow's biggest drag, said the inaugural flight of its long-delayed 787 Dreamliner will be postponed so it can reinforce a section of the aircraft. Boeing's stock plunged 7.8 percent to $43.25.

"Over the last month, the market started to feel comfortable with Boeing's production guidelines, but this news is clearly a disappointment," said Ryan Larson, head of equity trading at Voyageur Asset Management in Chicago.

Investors' bargain hunting lifted financials, the S&P 500's best-performing sector. Shares of JPMorgan Chase rose 2.6 percent to $33.71 after falling 6.1 percent on Monday, while Bank of America gained 2.9 percent to $12.28 a day after sliding 9.7 percent.

The KBW bank index rose 1.3 percent.

On the economic front, sales of used homes rose in May at a pace below consensus, but it was the first time the number rose in two consecutive months since September 2005.

Shares of home builders advanced, with DR Horton, up 1.3 percent at $9.30 and KB Home up 3.2 percent at $14.04, leading the 1.4 percent rise in the Dow Jones home construction index.

The Dow Jones industrial average dropped 6.20 points, or 0.07 percent, to 8,332.81. The Standard & Poor's 500 Index gained 2.27 points, or 0.25 percent, to 895.31. The Nasdaq Composite Index edged up 1.09 points, or 0.06 percent, to 1,767.28.