US STOCKS-Wall St edges up, could see brief pullback

                                

                                
 * Stocks struggle to rise from 2 1/2-year highs
                                
 * Obama proposes budget, sets up fiscal fight
                                
 * Wal-Mart shares fall after JPMorgan downgrade
                                
 * Dow off 0.1 pct, S&P up 0.1 pct, Nasdaq up 0.3 pct
                                
 * For up-to-the-minute market news see [STXNEWS/US]
  (Updates to afternoon)
                                
 By Ryan Vlastelica
                                
 NEW YORK, Feb 14 (Reuters) - The S&P and Nasdaq ticked
higher on Monday, though persistently below-average volume
suggested that investor enthusiasm was waning after gains
carried stocks to 2 1/2-year highs last week.
                                
 Equities have gained on strong corporate results and the
resignation of Egyptian President Hosni Mubarak, which eased
tensions in the region for now. Expectations of a pullback by
stocks have yet to be fulfilled, though light volume has fed
concerns.
                                
 "The lack of volume hints at a market top, and without
heavier action it looks increasingly difficult for us to grow
more," said Andrew Wilkinson, senior market analyst at
Interactive Brokers in Greenwich, Connecticut.
                                
 President Barack Obama proposed a federal budget that would
cut the U.S. deficit by $1.1 trillion over the next 10 years.
Congress must approve the plan, and Republicans, who are in the
majority in the House, said it did not curb spending enough.
For details, see [ID:nN14301981]
                                
 The budget provides $8 billion for clean energy, but big
drugmakers could take a hit from generic competition under two
proposals put forth in the plan.
                                
 Among alternative energy companies, Trina Solar <TSL.N>
gained 5.8 percent to $28.96 while GT Solar International
<SOLR.O> climbed 2 percent to $11.42. Pharmaceutical maker
Merck & Co <MRK.N>, a Dow component, slid 0.7 percent to
$32.83.
                                
 The S&P 500 has gained nearly 13 percent since the start of
December and is within a few percentage points of fully
recovering from the financial crisis low hit on March 6, 2009.
Some traders said they see residual strength in the market,
with investors willing to buy on any declines in prices.
                                
 "We wouldn't be surprised to see a pullback, but longer
term we think the market has room to grow," said Mitch Rubin,
chief investment officer at RiverPark Advisors in New York.
"Because of that, we would use any pullback to add to our
positions."
                                
 The Dow Jones industrial average <.DJI> was down 9.04
points, or 0.07 percent, at 12,264.22. The Standard & Poor's
500 Index <.SPX> was up 1.68 points, or 0.13 percent, at
1,330.83. The Nasdaq Composite Index <.IXIC> was up 7.86
points, or 0.28 percent, at 2,817.30.
                                
 Wal-Mart Stores Inc <WMT.N> was one of the worst performers
on the Dow after JPMorgan downgraded the stock, seeing weak
traffic and lower market share for the retail giant in 2011.
Shares fell 1.2 percent to $55.03. [ID:nL3E7DE16Z]
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 China's trade surplus fell to its lowest level in nine
months in January as imports surged, helping to lift Asian
markets and sending European commodity stocks higher.
[ID:nTOE71A01I]
                                
 The data also boosted North American natural resource
shares. Freeport McMoRan Copper & Gold Inc <FCX.N> rose 4.6
percent to $56 while Alcoa Inc <AA.N> rose 1.5 percent to
$17.64 and was one of the Dow's top gainers.
                                
 New deals continued a string of recent merger and
acquisition activity. EchoStar Corp <SATS.O> agreed to buy
Hughes Communications Inc <HUGH.O> for about $1.33 billion,
while private equity firm Clayton, Dubilier & Rice agreed to
take Emergency Medical Services Corp <EMS.N> private for about
$3 billion. [ID:nL3E7DE0TR] [ID:nN14278970]
                                
 Shares of Hughes fell 3.9 percent to $59.40 while EchoStar
rose 1.7 percent to $30.38. Emergency Medical fell almost 11
percent to $62.93.
                                
 General Electric Co <GE.N> plans to buy the well support
division of British energy services firm John Wood Group Plc
<WG.L> for about $2.8 billion in the latest move to boost its
presence in oil services. GE rose 0.9 percent to $21.53.
[ID:nN13242867]
 (Editing by Kenneth Barry)