Dow and S&P flat ahead of earnings

NEW YORK (Reuters) - The Dow and S&P were little changed on Friday, following three days of gains as investors looked ahead to the start of earnings season while Google helped keep the Nasdaq in modestly positive territory.

Google Inc added 1.7 percent to $464.37 after Beijing gave it the green light to continue operating its China search page. U.S.-listed shares of rival Baidu Inc fell 2.9 percent to $70.32.

The S&P 500 has risen 4.8 percent this week, on track for the best week this year. Most of the advance has been driven by the hope that companies will post strong quarterly results in the upcoming earnings season, which Alcoa Inc unofficially kicks off on Monday after the bell.

Despite the week's gains, marked by volatility and low volume, sentiment remains fragile. Many investors are concerned that the global economy could experience a double-dip recession. Those fears have driven the S&P 500 down about 12 percent from its most recent closing high in late April, and down about 4 percent so far this year.

"Everyone is anxious to see whether earnings are good enough to outweigh some of the more significant macroeconomic trends we're facing," said Jordan Posner, senior portfolio manager at Matrix Asset Advisors in New York.

"Everyone is marking time until we get some numbers."

The Dow Jones industrial average <.DJI> was up 4.39 points, or 0.04 percent, at 10,143.38. The Standard & Poor's 500 Index <.SPX> was up 1.22 points, or 0.11 percent, at 1,071.47. The Nasdaq Composite Index <.IXIC> was up 5.79 points, or 0.27 percent, at 2,181.19.

Johnson & Johnson was the biggest drag on the Dow, falling 1.2 percent to $60.63 a day after it recalled more Tylenol and other over-the-counter drugs after they were linked to a musty or moldy odor. The move expands a recall started in January.

In deal news, Air Products and Chemicals Inc late Thursday raised its hostile bid for rival Airgas Inc by 5.8 percent to $5.3 billion, but the offer remained slightly below the company's current market value.

Air Products shares rose 0.9 percent to $69.41, while Airgas stock shot up 1.6 percent to $64.86.

On the economic front, U.S. wholesale sales fell unexpectedly in May for the first time in more than a year, lifting inventories to their highest level in 11 months, a government report showed on Friday.

Recent U.S. data showing slowing growth in the services and manufacturing sector, weakness in housing and a stagnating jobs market has worried investors, although most say it is too early to call a "double-dip" recession.

Equity funds worldwide suffered more than $11 billion in net outflows in the first week of July, while money market funds attracted the biggest inflows in 18 months amid fears of a double-dip recession, fund tracker EPFR Global said.

(Editing by Jan Paschal)

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