US STOCKS-Wall St sags on profit taking after month-long rally

                                

  * Investors book profits after month-long rally
  * Jobless claims fall, Q2 GDP growth read revised up
  * Semiconductors' shares fall, but Boeing advances
  * Dow down 0.4 pct, S&P off 0.2 pct, Nasdaq off 0.1 pct
                                
 * For up-to-the-minute market news see [STXNEWS/US]
 (Updates to late afternoon trading; changes byline)
                                
 By Angela Moon
                                
 NEW YORK, Sept 30 (Reuters) - U.S. stocks took a breather
for a second day on Thursday as investors took profits from an
exceptionally strong September that has the S&P 500 up around 9
percent from a month ago.
                                
 Investors seemed torn as to whether end-of-quarter
positioning or the data should set the market's direction,
resulting in a volatile session. After up and down moves of
nearly 1 percent, equities were little changed in late
afternoon trading.
                                
 Stocks were still on track for the biggest monthly gain
since April 2009, defying September's track record of being
historically the worst month for stocks. In the third quarter,
the S&P 500 is up around 11 percent.
                                
 But analysts said the S&P 500 seemed to be struggling to
break above the current trading range.
                                
 Larry McMillan, president of McMillan Analysis Corp, said
the stock market continues to act tired, as it is having
trouble getting through the 1,145-1,150 area on the S&P 500
index <.SPX>.
                                
 "This is the fifth day that it has made a daily high in
that range. A close above there would be positive, and the fact
that this is the end of the quarter might be enough to push it
through," he said in a daily report.
                                
 But he noted there are still overbought conditions and
negative divergence.
                                
 "We think a pullback will be required to rid the market of
those items and then it can move higher in line with the
intermediate-term buy signals that still exist. Those bullish
signals continue to include the equity-only put-call ratios,
the broader trend of the CBOE Volatility Index, the breadth
oscillator buy signals and the chart of the SPX," he said.
                                
 The Dow Jones industrial average <.DJI> fell 39.58 points,
or 0.37 percent, to 10,795.70. The Standard & Poor's 500 Index
<.SPX> slipped 2.02 points, or 0.18 percent, to 1,142.71. The
Nasdaq Composite Index <.IXIC> shed 2.97 points, or 0.12
percent, to 2,373.59.
                                
 Semiconductor companies, a growth sector that advanced
during the quarter, ranked among the day's losers and weighed
on the Nasdaq.
                                
 SanDisk Corp <SNDK.O> lost 2.6 percent to $36.65 and was
the biggest loser in the Nasdaq 100 <.NDX>. The Philadelphia
semiconductor index <.SOX> fell 0.8 percent.
                                
 In the options market, bearish activity was detected in
Micron Technology Inc <MU.O> about a week before its quarterly
results, and in Dell Inc <DELL.O>, as some investors appear to
be taking defensive positions.
                                
 "Option plays in both Dell and in Micron Tech today appear
to be investors protecting their recent gains in these
respective stocks," said Joe Kinahan, TD Ameritrade's chief
derivatives strategist.
                                
 "The common thread in both of these tech stocks is that
investors are nervous after a spectacular September for stocks
and are looking for ways to hedge their positions and still
enjoy further upside if we continue to rally."
                                
 The Dow's biggest advancer was Boeing Co<BA.N>, up 0.9
percent at $66.59 after the aircraft manufacturer said its
full-year results would not be hurt by its delaying the first
delivery of its 747-8 Freighter, its biggest commercial jet.
[ID:nN30156233]
                                
 American International Group Inc <AIG.N> rose 4.1 percent
to $38.97 after the insurer and the U.S. government unveiled a
plan for the company to repay its $182.3 billion taxpayer
bailout. [ID:nN30139597]
                                
 Prudential Financial Inc <PRU.N> shares fell 4.4 percent to
$54.06 after it agreed to buy two Japanese life insurance units
from AIG for $4.2 billion. [ID:nN30139597]
                                
 The market had opened higher after data showed Initial
jobless claims fell sharply in the latest week, pointing to
modest strengthening in the labor market, while the Commerce
Department revised higher its final read on second-quarter
economic growth, as measured by gross domestic product. That
backed up stronger readings for regional business activity
indexes in New York City and the U.S. Midwest, seen as early
indicators before national surveys on Friday and later next
week. For details, see [ID:nN30285244]
 (Reporting by Angela Moon; Additional reporting by Doris
Frankel; Editing by Jan Paschal)