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US STOCKS-Market flat, China weighs on energy shares

Published 02/08/2011, 11:34 AM
Updated 02/08/2011, 11:36 AM

* Outside commodities, China impact on stocks limited

* Merger activity continues with healthcare deal

* Indexes: Dow up 0.3 pct, S&P up 0.1 pct, Nasdaq flat (Updates to late morning; changes byline)

By Angela Moon

NEW YORK, Feb 8 (Reuters) - Wall Street was little changed on Tuesday as an interest hike by China weighed on energy shares and major indexes faced resistance near 2 1/2-year highs.

The S&P, which topped resistance at 1,313, faced a new hurdle around 1,325, with near-term support at 1,300 and 1,295.

The index reached its highest 2 1/2 years on Monday after three consecutive sessions of gains.

In the latest move to battle inflation, China's central bank raised interest rates by 25 basis points, its second increase in six weeks.

The S&P energy index fell 1 percent to be the worst-performing sector on the index.

"We need a breather at this point for a healthier market,"said Randall Warren, president at Warren Financial Service in Philadelphia.

"China is weighing on commodity prices and commodity stocks, but it's not weighing so much on the entire market," suggesting Wall Street has the momentum to move higher, Warren said.

The Dow Jones industrial average was up 30.39 points, or 0.25 percent, at 12,192.02. The Standard & Poor's 500 Index was up 1.43 points, or 0.11 percent, at 1,320.48. The Nasdaq Composite Index was down 1.62 points, or 0.06 percent, at 2,782.37.

The Dow was being supported McDonald's Corp, which posted stronger-than-expected global sales at established restaurants as demand in Europe rebounded, coming in far above Wall Street estimates. The stock was up 3.4 percent at $75.93.

Merger activity continued for a second day with Kindred Healthcare Inc's planned acquisition of RehabCare Group Inc to create a post-acute healthcare services company..

Kindred Healthcare jumped 24.6 percent to $24.28 and RehabCare soared 44.2 percent to $36.73.

But Teva Pharmaceutical Industries' shares fell 5.8 percent to $51.77 after the world's biggest maker of generic drugs reported results that fell short of forecasts.. (Reporting by Angela Moon; Editing by Kenneth Barry)

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