US STOCKS-Market flat as energy tempers auto uncertainty

                                
 * Energy shares rally; auto bailout faces headwinds
                                
 * Jobless data points to worsening labor market
                                
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[STXNEWS/US]
 (Updates to midday, changes byline)
                                
 By Deepa Seetharaman
                                
 NEW YORK, Dec 11 (Reuters) - U.S. stocks were little
changed on Thursday as energy shares rallied for the second
straight day spurred by a bullish outlook on oil, offsetting
concerns over the fate of a bailout for U.S. automakers.
                                
 Chevron <CVX.N> shares rose 3.8 percent to $81.43, making
the stock the Dow's top boost, as crude oil jumped 4.5 percent
after the International Energy Agency said world oil demand
would resume growing in 2009. For details see [ID:nN11366723].
                                
 But the fate of a $14 billion package of loans for General
Motors Corp <GM.N> and Ford Motor Co <F.N> hung in the air in
the U.S. Senate, a day after it passed in the U.S. House of
Representatives.
                                
 Senate Republican leader Mitch McConnell of Kentucky said
the existing plan "isn't nearly tough enough" on automakers, in
a sign of how much opposition the proposal faces. A Senate vote
is expected as early as Thursday. [ID:nWEN1699]
                                
 GM stock fell 7.6 percent to $4.25 and Ford slipped 4.9
percent to $3.09.
                                
 "Very few people think nothing will be done regardless of
the Republican sentiment," said John O'Brien, senior vice
president at MKM Partners in Cleveland. "There's so many
different sectors that are tied to the autos."
                                
 The Dow Jones industrial average <.DJI> rose 5.58 points,
or 0.06 percent, at 8,767.00. The Standard & Poor's 500 Index
<.SPX> edged up 0.33 points, or 0.04 percent, at 899.57. The
Nasdaq Composite Index <.IXIC> slipped 2.63 points, or 0.17
percent, at 1,562.85.
                                
 Investors fear that without government help a possible
failure or bankruptcy in the auto sector could send shock-waves
through the economy and worsen unemployment.
                                
 Investors also grappled with fresh signs of labor market
deterioration. A U.S. Labor Department report showed the number
of people filing for new unemployment benefits surged to a
26-year high last week after employers shed workers in
anticipation of a tough recession.
                                
 Still, the market was cushioned by shares of biotechnology
and pharmaceutical companies, including Eli Lilly and Co
<LLY.N>, up 3.5 percent to $36.22 after the company issued a
solid 2009 earnings forecast. [ID:nN11333832]
                                
 On the Nasdaq, Amylin Pharmaceuticals <AMLN.O> jumped
nearly 18 percent to $10.07 after news that the company would
seek approval for a long-acting version of its diabetes drug
Byetta by mid-2009. [ID:nN11385050]
                                
 Traders said a rotation into energy shares was pulling some
cash out of technology and financials, among sectors that have
been at the forefront of the market's 20 percent run-up since a
Nov. 21 low.
                                
 Banks proved to be a big weight on stocks. JPMorgan Chase
<JPM.N> was the top drag on the Dow, falling 4.9 percent to
$31.87. Wells Fargo & Co <WFC.N> also fell 8.4 percent to
$26.75 after an influential analyst cut the bank's price
target. [ID:nWNAB1901]
                                
 The KBW Bank Index <.BKX> was down about 4.5 percent.
 (Editing by James Dalgleish)