US STOCKS-Wall St falters on prospects of another government shutdown

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* Trade-sensitive industrials biggest gainers among S&Psectors

* U.S. lawmakers working on border deal ahead of deadline

* S&P up 0.13 pct, Nasdaq gains 0.29 pct, Dow off 0.07 pct (Updates to early afternoon)

By Amy Caren Daniel

Feb 11 (Reuters) - U.S. stocks gave up early gains and werestruggling for direction on Monday, as investors weighed thepossibility of another partial government shutdown and tradetalks between the world's two largest economies resumed inBeijing.

Top Democratic and Republican negotiators on border securityfunding were scheduled to meet later in the day in a bid toreach a deal by a Friday deadline set by President Donald Trumpto find a compromise.

"There is a looming threat of another shutdown, because ifwe go into another shutdown, it could last even longer than theprevious one," said Matt Lloyd, chief investment officer,Advisors Asset Management in Monument, Colorado.

"Markets won't make a significant move in one directionuntil they can gauge where we stand on trade or the governmentshutdown."

China's upbeat tone on trade talks and White House seniorcounselor Kellyanne Conway's bullish comments on a possible dealhelped the three indexes open higher.

The gains soon evaporated as the healthcare sector .SPXHC fell 0.21 percent, pressured by a more than 1.5 percent drop inthe shares of UnitedHealth GroupUNH.N , Pfizer IncPFE.N andMerck & Co MRK.N . The stocks were also the biggest drags onthe blue-chip Dow index.

The trade-sensitive industrials sector .SPLRCI held on togains and were last up 0.59 percent, the most among the 11 majorS&P sectors, boosted by Caterpillar Inc'sCAT.N 1.01 percentrise.

At 12:42 p.m. ET, the Dow Jones Industrial Average .DJI was down 18.00 points, or 0.07 percent, at 25,088.33. The S&P500 .SPX was up 3.39 points, or 0.13 percent, at 2,711.27 andthe Nasdaq Composite .IXIC rose 21.36 points, or 0.29 percent,to 7,319.56.

The benchmark S&P index is about 15 percent higher than itsDecember lows, helped in part by a dovish Federal Reserve andlargely upbeat earnings reports.

About 71 percent of the S&P 500 companies that have reportedfourth-quarter earnings have topped estimates, according to IBESdata from Refinitiv. But analysts' estimates for first-quarterearnings have turned negative for the first time since 2016.

Among other stocks, Electronics Arts IncEA.O gained 5.1percent, the most among S&P 500 companies, after analysts wereupbeat about a strong start to the videogame publisher's newlylaunched rival to "Fortnite".

Rivals Take-Two Interactive Software IncTTWO.O fell 3.1percent and Activision Blizzard IncATVI.O , due to reportresults on Tuesday, dropped 5.7 percent.

Advancing issues outnumbered decliners by a 1.77-to-1 ratioon the NYSE and by a 1.62-to-1 ratio on the Nasdaq.

The S&P index recorded 31 new 52-week highs and three newlows, while the Nasdaq recorded 55 new highs and 15 new lows. (Reporting by Amy Caren Daniel and Shreyashi Sanyal inBengaluru; Editing by Saumyadeb Chakrabarty and SrirajKalluvila) ((Amy.CarenDaniel@thomsonreuters.com ; within U.S.+1-646-223-8780; outside U.S. +91 80 6749 9250 ; ReutersMessaging: Amy.CarenDaniel.thomsonreuters.com@reuters.net))

The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

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