Wall St. little changed; utilities fall as debt yields rise

NEW YORK (Reuters) - U.S. stocks were little changed in afternoon trading Friday as a rosy U.S. jobs report supported expectations of a rise in U.S. interest rates by mid-year, helping financial stocks that benefit from higher rates but hurting utilities.

The S&P 500 index of utilities <.SPLRCU>, used as a bond proxy by investors in a low-rate environment, dropped 3.3 percent. It was on track for its biggest daily drop since August 2011 following a jump in U.S. government debt yields. Simon Properties, a real estate investment trust, was down 3.7 percent at $195.77.

The financials sector, which tends to benefit from rising interest rates, was among the biggest positive for the S&P 500, with the S&P financial index <.SPSY> up 1.1. percent.

Nonfarm payrolls increased more than expected in January and wages rebounded, while jobs for November and December were revised sharply higher. The unemployment rate ticked up to 5.7 percent as a result of an increased labor force.

After the report, traders added to bets that the central bank will start to hike interest rates by mid-year.

"These numbers suggest the underlying strength in the economy continues and that will manifest itself in GDP growth," said Quincy Krosby, market strategist at Prudential Financial, based in Newark, New Jersey.

But, "traders have not made up their minds if good news is really good news," because of how it might affect the timing of the Fed's rate move.

At 2:28 p.m., the Dow Jones industrial average <.DJI> fell 24.05 points, or 0.13 percent, to 17,860.83, the S&P 500 <.SPX> gained 0.54 points, or 0.03 percent, to 2,063.06 and the Nasdaq Composite <.IXIC> dropped 2.91 points, or 0.06 percent, to 4,762.19.

Twitter jumped 15.8 percent to $47.77 after it beat Wall Street's profit and revenue targets in the fourth quarter.

LinkedIn surged 11 percent to $265.12 after the corporate networking site reported a higher-than-expected 44 percent jump in quarterly revenue as more businesses used its services to assess candidates for employment.

But action camera maker GoPro Inc tumbled 12 percent to $47.82 after it forecast a current-quarter profit that could miss Wall Street expectations and said its chief operating officer was resigning.

The S&P 500 <.SPX> is up about 3 percent for the week, its best weekly performance since October, buoyed by a rebound in oil prices.

Declining issues outnumbered advancers on the NYSE by 1,868 to 1,184, for a 1.58-to-1 ratio; on the Nasdaq, 1,377 issues fell and 1,313 advanced for a 1.05-to-1 ratio favoring decliners.

The benchmark S&P 500 index was posting 43 new 52-week highs and 2 new lows; the Nasdaq Composite was recording 96 new highs and 20 new lows.

(Additional reporting by Chuck Mikolajczek; Editing by Bernadette Baum)