US STOCKS-Wall St dips on Portugal fears; Alcoa falls late

                                

                                
 * Apple lifts Nasdaq on iPhone sale bets
                                
 * Strayer enrollment decline hurts education stocks
                                
 * Duke Energy to buy Progress for $13.7 billion
                                
 * Dow off 0.3 pct, S&P down 0.1 pct, Nasdaq up 0.2 pct
                                
 * For up-to-the-minute market news see
 (Updates with Alcoa in paragraphs 4-5, AMD and Nvidia in
paragraphs 14-15, updates volume)
                                
 By Rodrigo Campos
                                
 NEW YORK, Jan 10 (Reuters) - U.S. stocks recovered most of
their early losses in light volume and ended slightly lower on
Monday as prospects for strong earnings helped counter fears
Portugal would be forced into a bailout.
                                
 Investors say the market's upward trend remains intact, but
the S&P's third straight session of declines suggests momentum
has stalled.
                                
 Traders also cited the positive outlook for earnings as a
catalyst for the rebound. Even though The S&P 500 edged down,
the number of advancers outweighed decliners on both the New
York Stock Exchange and the Nasdaq.
                                
 Alcoa Inc <AA.N>, the largest U.S. aluminum producer,
unofficially began the earnings season after the closing bell
by posting a fourth-quarter profit that topped Wall Street
forecasts. Still, its shares fell 2 percent to $16.16 in
after-hours trading. [ID:nN10289343].
                                
 Alan Lancz, president of Alan B. Lancz & Associates Inc in
Toledo, Ohio, said Alcoa's performance should help the market.
"It's a good first shot across the bow for the earnings
season," he said.
                                
 Stocks initially fell Monday on worries Lisbon would have
to seek a bailout, but concerns faded on talk of support from
the European Central Bank.
                                
 The euro, seen of late as a proxy for investors' risk
appetite, gained 0.5 percent against the U.S. dollar,
recovering from a four-month low.
                                
 "We believe that it's prudent to monitor debt problems in
Ireland, Spain and Portugal, but these situations are nowhere
near crisis levels, and we believe they are largely overblown,"
said Doug Cote, who helps manage about $50 billion as senior
market strategist with ING Investment Management in New York,
noting the rebound in the euro.
                                
 The Dow Jones industrial average <.DJI> fell 37.31 points,
or 0.32 percent, to 11,637.45. The Standard & Poor's 500 Index
<.SPX> dipped 1.75 points, or 0.14 percent, to 1,269.75. The
Nasdaq Composite Index <.IXIC> gained 4.63 points, or 0.17
percent, to 2,707.80.
                                
 The benchmark S&P 500 found technical support near its
14-day moving average, now around 1,264.
                                
 Merger deals announced on Monday included Duke Energy Corp
<DUK.N> agreeing to buy Progress Energy Inc <PGN.N> for $13.7
billion in stock. DuPont <DD.N> plans to buy Danisco <DCO.CO>,
a Danish food ingredient firm, for $5.8 billion. For details
see [ID:nSGE70909G] [ID:nLDE7090IW].
                                
 Shares of Progress fell 1.6 percent to $43.99, and Duke
fell 1.2 percent to $17.58. DuPont, a Dow component, fell 1.5
percent to $49.03 while Danisco rose 24 percent.
TECH SHARES IN FOCUS
                                
 Apple Inc <AAPL.O>, up 1.9 percent to $342.46, led the
Nasdaq higher on bets of stronger sales as an announcement of
the end of AT&T Inc's <T.N> more than three years of exclusive
U.S. rights to sell Apple's iPhone was expected. AT&T fell 1.8
percent to $28.34. [ID:nN10268581].
                                
 After the close, AMD <AMD.N> shares dropped 4.2 percent to
$8.80 on news the chipmaker's chief executive had resigned.
                                
 Intel Corp <INTC.O> said it is paying graphics chip
designer Nvidia Corp <NVDA.O> a $1.5 billion licensing fee,
settling a legal dispute and boosting Nvidia's shares 4.7
percent to $21.60. [ID:nN10289769].
                                
 Education stocks slid after Strayer Education Inc <STRA.O>
said new enrollments at its university fell 20 percent in the
winter term. [ID:nSGE7090BG].
                                
 Strayer shares plunged 22.6 percent to $118.60. Corinthian
Colleges Inc <COCO.O> tumbled 13.3 percent to $4.58.
                                
 Apollo Group Inc <APOL.O>, lost 5.4 percent to $35.94 but
recovered its losses after the bell, following its quarterly
results. In extended trading, Apollo jumped 9.6 percent to
$39.37.
                                
 About 7.4 billion shares traded on the New York Stock
Exchange, the American Stock Exchange and Nasdaq, below last
year's estimated daily average of 8.47 billion.
                                
 Advancing stocks outnumbered declining ones on the NYSE by
1,543 to 1,458, while on the Nasdaq, about five stocks rose for
every four that fell.
 (Reporting by Rodrigo Campos; additional reporting by Caroline
Valetkevitch; Editing by Kenneth Barry)