US STOCKS-Wall St to test 2-yr high on jobs data

                                

                                
 * S&P 500 faces strong resistance after two-day rally
                                
 * Payrolls data on tap, unemployment seen unchanged
                                
 * Futures up: Dow 6 pts, S&P 2.7 pts, Nasdaq 5 pts
                                
 * for up-to-the-minute market news see [STXNEWS/US]
  (Updates prices, adds quote, byline)                     
                                
 By Rodrigo Campos
                                
 NEW YORK, Dec 3 (Reuters) - Wall Street's largest two-day
rally in three months will be tested by jobs data on Friday,
with some in the market predicting a strong report that will
push the S&P 500 to a fresh two-year high.
                                
 Non-farm payrolls figures, due at 8:30 a.m. EST (1330 GMT)
are expected to show U.S. employers added 140,000 jobs in
November after a rise of 151,000 jobs in October. The
unemployment rate is seen remaining at 9.6 percent.
                                
 The U.S. economic conditions in the services sector as well
as factory orders data are due at 10 a.m. EST (1500 GMT).
                                
 "There's no reason to believe these numbers are not coming
as expected, if not better," said Paul Mendelsohn, chief
investment strategist for Windham Financial Services in
Charlotte, Vermont.
                                
 "But you don't want to see a 'sell the news' scenario. If
(the S&P 500) can't get through this technical resistance
points that are now in play, I'd be concerned, especially if
the (economic) news is good."
                                
 The S&P 500 <.SPX> closed at 1,221.53 on Thursday and faces
strong technical resistance around 1,228, in the area of a
recent high of more than two years and also the 61.8 percent
Fibonacci retracement of the index's slide from October 2007 to
March 2009, a key technical indicator.
                                
 S&P 500 futures <SPc1> edged up 2.7 points and were above
fair value, a formula that evaluates pricing by taking into
account interest rates, dividends and time to expiration on the
contract. Dow Jones industrial average futures <DJc1> gained 6
points, and Nasdaq 100 futures <NDc1> added 5 points.
                                
 Wall Street climbed for a second day Thursday as concerns
about Europe's sovereign debt crisis waned, prompting investors
to reverse bearish bets on the market. The S&P 500 <.SPX> rose
3.5 percent over the two sessions, its largest such advance
since early September.
                                
 The euro edged higher as the European Central Bank
continued to buy euro zone government bonds in moderate amounts
to counter a destabilizing rise in peripheral countries'
borrowing costs. That soothed investor nerves and helped the
currency rebound from a 2-1/2 month low that had weighed on
U.S. and global equity markets. [ID:nLDE6B20AX]
                                
 "Stability in the euro is absolutely critical" for the
uptrend in stocks to continue, Windham's Mendelsohn said.
                                
 In company news, U.S.-based mining group Walter Energy Inc
<WLT.N> agreed to buy Canada's Western Coal Corp
<WTN.TO><WTN.L> for about $3.25 billion to create the world's
leading metallurgical coal producer. [ID:nLDE6B20EU]
                                
 European Union antitrust regulators have raided the offices
of some pharmaceutical companies, including AstraZeneca Plc
<AZN.L><AZN.N>, suspected of colluding to block cheaper generic
drugs from entering the market. [ID:nLDE6B20MP]
                                
 China will switch to a prudent monetary policy from a
moderately loose stance, the Communist Party's top leaders
decided Friday, a change that could pave the way for more
interest rate increases and lending controls. [ID:nTOE6B2048]
  (Reporting by Rodrigo Campos; editing by Jeffrey Benkoe)