US STOCKS-Wall Street little changed after two-day rally, GM jumps

Leah Schnurr

* S&P 500 little changed after best two-day run in a month

* GM surges, will buy back shares from Treasury

* Oracle gains as software sales boost profit

* Dow down 0.1 pct, S&P down 0.2 pct, Nasdaq up 0.01 pct

NEW YORK, Dec 19 (Reuters) - U.S. stocks were little changed

on Wednesday as investors found scant reason to continue buying

following the best two-day rally for the S&P in a month.

General Motors bucked the overall weakness to surge

more than 8 percent after the company said it will buy back 200

million of its shares from the U.S. Treasury, which plans to

sell the rest of its GM stake over the next 15 months. GM was up

8.6 percent at $27.68.

There was optimism that politicians were getting closer to

an agreement to avert the "fiscal cliff" - steep tax hikes and

spending cuts that will come into effect in the new year - but

that was not enough to push the market higher.

"The question has shifted to what a deal will look like and

entail, and markets are taking a pause as we consider that,"

said Scott Eldridge, director of portfolio management at Caprin

Asset Management in Richmond, Virginia.

"It seems like all the parties at the table have made steady

progress, but it continues to drown out all the other noise in


Republicans in the U.S. House of Representatives could vote

on Thursday on a "Plan B" tax bill that would extend low tax

rates, except on income of $1 million and above, though the

White House said President Barack Obama would veto the proposal.

Investors are concerned the fiscal cliff could send the

economy back into recession, though most expect a deal will be

reached eventually.

The Dow Jones industrial average slipped 11.80

points, or 0.09 percent, to 13,339.16. The Standard & Poor's 500

Index eased 2.12 points, or 0.15 percent, to 1,444.67.

The Nasdaq Composite Index added 0.36 points, or 0.01

percent, to 3,054.89.

Markets have been buoyed in recent weeks by any signs that

an agreement between policy makers over the budget may be

reached, with banks and energy shares - groups that outperform

during periods of economic expansion - leading gains.

The S&P added 2.3 percent over the past two sessions, the

first time it has notched two straight days of 1 percent gains

since late July. Still, trading has been light ahead of the

holidays, and with investors' focus on the budget talks.

Defensive sectors led the downside on Wednesday, with the

utilities sector slipping 0.7 percent.

Gains in technology shares boosted the Nasdaq after Oracle

reported earnings that beat expectations on strong

software sales growth. Oracle jumped 3.4 percent to $34.00,

while the tech sector was up 0.1 percent.

Knight Capital Group Inc climbed 6.9 percent to

$3.56 after it agreed to be bought by Getco Holdings in a deal

valued at $1.4 billion. The stock, which nearly collapsed after

a trading error in August, remains down about 76 percent so far

this year.