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US STOCKS-Indexes struggle to extend gains

Published 02/02/2011, 01:17 PM
Updated 02/02/2011, 01:20 PM

* Indexes face technical resistance after 2 1/2 yr highs

* Private employers add more jobs than forecast-ADP

* Investors eye Egypt as protests persist

* Stocks: Dow flat, S&P down 0.2 pct, Nasdaq flat (Updates to early afternoon trade)

By Angela Moon

NEW YORK, Feb 2 (Reuters) - U.S. stocks struggled to move higher on Wednesday as investors paused for a breather after the Dow and the S&P 500 closed at their highest in about 2-1/2 years.

Investors were reluctant to make big bets on stocks even though data showed U.S. private employers added more jobs than expected in January.

"The market needs to digest some of the gains we had in the past few days, we need a pause," said Eric Marshall, director of research at Hodges Capital Management in Dallas, Texas.

The Dow Jones industrial average was up 5.26 points, or 0.04 percent, at 12,045.42. The Standard & Poor's 500 Index fell 2.61 points, or 0.20 percent, at 1,304.98. The Nasdaq Composite Index rose 1.02 points, or 0.04 percent, at 2,752.21.

The Dow closed comfortably above the milestone 12,000 level for the first time since June 2008 on Tuesday and the S&P also closed above the psychological hurdle of 1,300 mark for the first time since August 2008.

Joseph Hargett, a strategist at Schaeffer's Investment Research, said the Dow needs to stay above 12,000 firmly as a short-term support.

"The resistance (for the Dow) now resides in the 12,100-12,200 area."

Despite a harsh winter storm that brought parts of the Midwest to a standstill, trading volume stood at about 3.4 billion shares at midday, near the average.

In the options market, about 6.6 million contracts exchanged hands in morning trading, also near the average.

The PHLX semiconductor index could be about to break strong resistance around the 450 area, which coincides with the 23.6 percent retracement of the slide from its historic highs in 2000 to the low hit in November 2008.

The index, currently up 0.3 percent at 453.26, is on track for a back-to-back close above 450, a feat not achieved since November 2007.

Investors kept an eye on the massive protests in Egypt as clashes erupted between opponents and supporters of President Hosni Mubarak. Concerns that protests would spread throughout the region have pressured equities in recent sessions.

The Market Vectors Egypt Index ETF which consists of shares of companies in Egypt, fell 2.9 percent to a session low of $17.99 after rising for two consecutive days.

In earnings news, appliance maker Whirlpool Corp dropped 3.2 percent to $82.69 after its profit missed estimates.

Time Warner Inc and Mattel Inc rallied after both companies reported stronger-than-expected quarterly profits. Media group Time Warner gained 8.3 percent to $34.98 while toymaker Mattel was up 1.7 percent to $24.54. (Additional reporting by Rodrigo Campos, Editing by Kenneth Barry)

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