US STOCKS-Futures flat as Wall St braces for payrolls data

                                

                                
 * Payrolls data expected to give market direction
                                
 * Fed's Bernanke to testify before Congress
                                
 * Futures: Dow up 5 pts, S&P off 0.7 pt, Nasdaq up 1 pt
                                
 * For up-to-the-minute market news see [STXNEWS/US]
  (Updates prices, adds quote, byline)
                                
 By Rodrigo Campos
                                
 NEW YORK, Jan 7 (Reuters) - Wall St braced Friday for a
volatile reaction to a U.S. payrolls report that could confirm
previous data pointing to a healing labor market.
                                
 Futures were little changed ahead of the report, due at
8:30 a.m. EST (1330 GMT), with economists expecting that the
U.S. economy created 175,000 new jobs in December, the highest
level since May. For details see [ID:nN06134458]
                                
 Economists revised their forecasts higher after Wednesday's
surprising strong ADP private-sector employment figures, which
were triple forecasts.
                                
 "The ADP data set the bar pretty high, and I think the
market will move dramatically if payrolls either come above
(estimates) or south of 100,000," said Kim Caughey Forrest,
senior equity research analyst at Fort Pitt Capital Group in
Pittsburgh.
                                
 Overbought levels on the S&P 500 <.SPX> opened the door to
the possibility of steep declines if payrolls disappoint.
Short-term technical support for the benchmark was found near
1,260, its 14-day moving average. The S&P closed at 1,273.85 on
Thursday.
                                
 S&P 500 futures <SPc1> edged down 0.7 point, with fair
value, a formula that evaluates pricing by taking into account
interest rates, dividends and time to expiration on the
contract, unchanged. Dow Jones industrial average futures
<DJc1> were up 5 points, and Nasdaq 100 futures <NDc1> rose 1
point.
                                
 Facing a newly empowered Republican Party skeptical of the
Federal Reserve's attempt to stimulate the U.S. economy,
chairman Ben Bernanke may douse some of Wall Street's optimism
as he delivers congressional testimony at 9:30 a.m. EST (1430
GMT). [FED/AHEAD]
                                
 "The Fed likes to have their moves telegraphed, and they've
already told us they will continue with QE2," Forrest said. "If
(Bernanke) says anything away from that, that would surprise
the markets."
                                
 The Pentagon has overhauled the Lockheed Martin Corp
<LMT.N> F-35 fighter project for the second time in a year and
will buy 41 Boeing Co <BA.N> F/A-18 combat planes over the next
three years to offset slower Lockheed production.
[ID:nN06148346] and [ID:nN06140935]
                                
 The board of bailed-out insurer American International
Group Inc <AIG.N> approved a dividend that assumes its
recapitalization plan will close as soon as next week.
[ID:nN06150266]
                                
 Sara Lee Corp <SLE.N> is considering spinning off its meat
and coffee businesses after rejecting a takeover bid from
Brazil's JBS SA <JBSS3.SA>, a source said. [ID:nN06141638]
                                
 U.S. stocks were mostly lower Thursday as soft retail sales
and a sharp rise in the dollar sent both the Dow industrials
<.DJI> and S&P 500 down 0.2 percent. But the Nasdaq Composite
<.IXIC> rose 0.3 percent.
 (Reporting by Rodrigo Campos)