* Market stays near 29-month highs, supported by earnings
* P&G, AT&T fall after results, Caterpillar rises
* Netflix, Qualcomm boost Nasdaq
* Dow, S&P up 0.1 pct, Nasdaq up 0.4 pct (Updates to early afternoon)
By Rodrigo Campos
NEW YORK, Jan 27 (Reuters) - U.S. stock indexes held near 29-month highs on Thursday as buyers took their cues from companies reporting strong numbers, like Netflix, but the short-term technical picture suggested big gains are going to be hard to achieve.
Caterpillar and Qualcomm also advanced on earnings and outlooks, but results from such major companies as AT&T and Procter & Gamble disappointed.
The S&P 500 faces technical resistance near 1,300, an area where closing and session highs clustered during August 2008. Technical analysts also view 12,000 on the Dow as a possible sell trigger as the blue-chip average closes in on nine straight weeks of gains.
Caterpillar shares rose 1.5 percent to $97.15 after it reported a stronger-than-expected quarterly profit.
Movie rental company Netflix Inc soared 15 percent after hitting a lifetime high of $211.30 and electronics test equipment maker Teradyne Inc jumped 10.5 percent to $16.17. Both posted results Wednesday after the close.
The market is being driven by earnings, said Tom Schrader, managing director of U.S. equity trading at Stifel Nicolaus Capital Markets in Baltimore.
"Earnings have come in a little bit better than expected, and you're seeing increased volatility in individual issues," he said.
Shares of Dow components AT&T and P&G fell as their profits slid from the year-ago period, and AT&T's wireless subscriber growth came in below consensus. AT&T dropped 3 percent to $27.86, while P&G lost 2.9 percent to $64.17.
The Dow Jones industrial average rose 11.58 points, or 0.10 percent, to 11,997.02. The Standard & Poor's 500 gained 0.92 points, or 0.07 percent, to 1,297.55. The Nasdaq Composite added 11.65 points, or 0.43 percent, to 2,751.15.
The S&P has risen 2 percent since the start of the earnings season and is up 23.7 percent since Sept. 1. Various technical measures indicate the market may be overstretched.
"The market's had a nice run, and there's a sense among a lot of people it's overbought," Stifel Nicolaus' Schrader said.
"I wouldn't be surprised to see it correct 8 to 10 percent over the next quarter or so."
Thomson Reuters data showed 71 percent of the S&P 500 companies that have reported earnings so far have beaten estimates.
Qualcomm Inc helped lift the Nasdaq, rising 5.8 percent to $54.85 a day after it raised its outlook for second-quarter and full-year revenue.
Initial jobless claims surged to 454,000 in the latest week, rising to the highest level since late October, the government said.
In other economic news, new orders for U.S. manufactured goods fell unexpectedly in December and contracts for pending home resales rose faster than expected in December. (Reporting by Rodrigo Campos; Editing by Kenneth Barry)