US STOCKS-Wall Street stalls on signs rally is played out

                                

                                
 * Indexes face technical resistance after 2 1/2-year highs
                                
 * Investors eye Egypt as protests persist
                                
 * Dow up 0.02 pct, S&P down 0.3 pct, Nasdaq down 0.06
                                
 * For up-to-the-minute market news see [STXNEWS/US]
 (Updates closing prices, adds link to story on semiconductors
in paragraph 17)
                                
 By Edward Krudy
                                
 NEW YORK, Feb 2 (Reuters) - U.S. stocks stalled on
Wednesday as technical measures suggested a five-month rally
was growing long in the tooth.
                                
 Investors were reluctant to make big bets even though a
report showed U.S. private employers added more jobs than
expected in January. For details, see [ID:nN02187589].
                                
 The S&P 500 started to look overbought again after reaching
2 1/2-year highs on Tuesday. A key measure of the rally's
strength suggests stocks are vulnerable to a correction,
analysts said.
                                
 The PHLX Semiconductor Index <.SOX> was running into
resistance around 450 after back-to-back closes above that
level for the first time since November 2007. Chips are
considered a leading indicator for the broader market.
                                
 "If the market looks like it's ready for a 5 percent or
more correction, what's one of the sectors at the top of my
list to be out of? For sure it's the semiconductors," said
Vinny Catalano, chief investment strategist at Blue Marble
Research in New York.
                                
 The Dow closed on Tuesday above the milestone 12,000 level
for the first time since June 2008, and the S&P closed above
the 1,300 level for the first time since August 2008.
                                
 Investors on Wednesday kept an eye on protests in Egypt as
violent street clashes erupted. Concerns that protests could
spread to other countries in the region have pressured equities
in recent sessions. [ID:nLDE71100I]
                                
 The Market Vectors Egypt Index ETF <EGPT.P>, which consists
of shares of companies in Egypt, fell 3.7 percent after rising
for two consecutive days.
                                
 The Dow Jones industrial average <.DJI> rose 1.81 points,
or 0.02 percent, at 12,041.97. The Standard & Poor's 500 Index
<.SPX> was down 3.56 points, or 0.27 percent, at 1,304.03. The
Nasdaq Composite Index <.IXIC> was down 1.63 points, or 0.06
percent, at 2,749.56.
                                
 Joseph Hargett, a strategist at Schaeffer's Investment
Research, said the Dow needs to stay above 12,000 firmly as a
show of short-term support. "The resistance now resides in the
12,100-12,200 area."
                                
 After a pullback late last week, the S&P 500 has started to
look overbought by some measures. The index is more than one
standard deviation above its 50-day moving average and the
weekly relative strength index is above 70.
                                
 Trading volumes were not seriously affected by a harsh
winter storm that brought parts of the U.S. Midwest to a
standstill.
                                
 The story was different for futures traders in Chicago,
which took much of the brunt of the storm.
                                
 "It's definitely light downtown here. Pit trading opened
late too. ... We're about half-staffed," said Frank Lesh, a
futures analyst and broker at FuturePath Trading LLC in
Chicago, where over 20 inches of snow had fallen.
                                
 Volume on the NYSE, Amex and Nasdaq reached 7.26 billion
shares compared to last year's daily average of about 8.47
billion.
                                
 Overall U.S.-listed option volume approaching the close was
about 15.3 million contracts, slightly below the recent average
daily volume, according to option analytics firm Trade Alert.
                                
 The PHLX semiconductor index closed up 0.5 percent at
453.91. The 450 area coincides with the 23.6 percent
retracement of the slide from the index's historic highs in
2000 to the low hit in November 2008. [ID:nN02269506]
                                
 The 23.6 percent retracement has been a breaking point in
the index's trading at least five times in the past decade.
<^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^
                                
 For a graphic see http://r.reuters.com/baz77r
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 Appliance maker Whirlpool Corp <WHR.N> dropped 2.1 percent
to $83.60 after its profit missed estimates. [ID:nN02176058]
                                
 Time Warner Inc <TWX.N> and Mattel Inc <MAT.O> rallied
after both companies reported stronger-than-expected quarterly
profits. Media group Time Warner gained 8.6 percent to $35.10
while toymaker Mattel was up 0.9 percent to $24.37.
[ID:nN02180792] [ID:nN01136189]
 (Reporting by Edward Krudy; Additional reporting by Rodrigo
Campos; Editing by Kenneth Barry)