Wall Street flat in choppy trading; telecoms fall

NEW YORK (Reuters) - Stocks hovered near the unchanged mark on Wednesday in choppy trading as the potential for tension to escalate between Russia and Ukraine kept risk seekers in check.

Equities recovered from an initial selloff that took the S&P 500 to its 100-day moving average, which provided technical support. But the benchmark gave up an earlier 0.4 percent advance by mid-afternoon.

The S&P 500 telecom services sector <.SPLRCL> slipped 1.5 percent as the worst performing industry, with AT&T and Verizon down on news that Sprint , facing regulatory resistance, gave up its bid for T-Mobile . Sprint lost 18.3 percent to $5.94 and T-Mobile fell 8 percent to $31.19.

Investors were leery after NATO reported Russia has around 20,000 combat-ready troops on the eastern border of Ukraine that it could use to invade under the pretext of a humanitarian or peace-keeping mission. Further souring the mood, Russian President Vladimir Putin announced Moscow's biggest economic response to Western sanctions so far.

"On the domestic side, we're seeing markets that are see-sawing and still appearing to be assessing damage from volatility over the last few days," said Lawrence Glazer, managing partner of Mayflower Advisors in Boston.

"Everything seems to be taking a backseat to concerns in Russia and Ukraine right now."

The Dow Jones industrial average <.DJI> rose 20.2 points, or 0.12 percent, to 16,449.67, the S&P 500 <.SPX> was up 1.33 points, or 0.07 percent, to 1,921.54 and the Nasdaq Composite <.IXIC> added 9.22 points, or 0.21 percent, to 4,362.05.

Market reaction was initially muted after data showed the U.S. trade deficit narrowed more than expected in June to the lowest reading since January. JPMorgan and Goldman Sachs were among Wall Street banks that raised economic growth estimates on the back of that figure.

Walgreen Co shares fell 12.2 percent to $60.66 after it said it would not use a full takeover of Europe's biggest pharmacy chain Alliance Boots to move its domicile overseas. The decision came a day after the Obama administration said it was considering administrative actions to discourage corporate inversions that are aimed at reducing tax bills.

Cognizant Technology shares took a beating, falling 14.2 percent to $42.88. The IT services provider forecast its slowest full-year sales growth in its 20-year history.

On the upside, Molson Coors Brewing Company gained 6.2 percent to $71.37 after better-than-expected earnings.

21st Century Fox Corp was another winner, its shares up 4.7 percent to $32.78, after the company pulled its $80-billion offer to buy Time Warner Inc on Tuesday. Time Warner shares slid 12.3 percent to $74.73.

(Editing by Nick Zieminski)