Indexes flat as casinos gain but retailers dip

NEW YORK, May 22 (Reuters) U.S. stocks were little changed on Tuesday as falling retail stocks offset gains in shares of casino operators after investor Kirk Kerkorian expressed interest in buying two Las Vegas properties from MGM Mirage Inc.

Kerkorian's Tracinda Corp. also said on Monday it would explore options for its majority stake in MGM. The company said it planned to enter talks to purchase MGM's Bellagio Hotel and City Centre properties. For details see ID:nN21358342. The announcement sent shares of several hotel and casino chains higher.

''At this point, nobody wants to sell because they don't want to miss a 25 percent potential move on a takeover,'' said Georges Yared, chief investment strategist of Yared Investment Research in Minneapolis. ''So everyone's reluctant to trim back positions.

You're not getting that normal profit-taking.'' The Dow Jones industrial average was down 4.47 points, or 0.03 percent, at 13,538.41. The Standard&Poor's 500 Index was down 1.29 points, or 0.08 percent, at 1,523.81. The Nasdaq Composite Index was down 0.34 points, or 0.01 percent, at 2,578.45.

Shares of retailer fell after a crop of disappointing quarterly reports.

Staples Inc. reported sales that slightly missed Wall Street estimates. The world's largest office supplies retailer said sales of furniture and business machines were ''weak.'' Staples' stock fell 5 percent to .44.

Zale Corp. reported a narrower-than-expected loss and forecast a loss for the current quarter. The mall-based jeweler said retail in general is showing signs of weakness ID:nWNAS2085. Shares of Zale fell 1.2 percent to .24.

Other casino stocks that rose included Wynn Resorts Ltd., up 5 percent to .50 and Las Vegas Sands Inc., also up 5 percent to .89. Starwood Hotel&Resorts Worldwide Inc. stock gained 1.7 percent to .51. Marriott International was up 1.6 percent to .44 on the NYSE.

Stocks showed little reaction to news from the Richmond Federal Reserve Bank, which said its composite manufacturing and service index was minus 10 in May, up from minus 11 in the previous month.

REUTERS DKS DB2007