Stocks drift as Dow holds 12,000

NEW YORK (CNNMoney) -- Stocks ended little changed Wednesday as uncertainty about Egypt hung over the market two days before the government's all-important payrolls report.

The Dow Jones industrial average (INDU) rose 2 points, or less than 0.1%, to close above 12,000 points for a second day.

The S&P 500 (SPX) slid 3 points, but was still above the high water mark of 1,300. The tech-heavy Nasdaq (COMP) lost 1 point to close at 2,750.

U.S. stocks started February with a bang Tuesday. The Dow and S&P 500 closed above key psychological levels for the first time in more than two years as investors cheered a robust reading on the manufacturing sector.

But the tone turned cautious Wednesday amid ongoing political unrest in Egypt, where anti-government protestors clashed with supporters of President Hosni Mubarak.

"People are keeping one eye on Egypt and one eye on the domestic economy," said Ryan Larson, a senior equity trader at RBC Global Asset Management, who braved a blizzard in Chicago on his way to work Wednesday.

On the domestic front, investors took in a better-than-expected report on private-sector payrolls, and a seasonal increase in planned job cuts in January.

While those reports were encouraging, investors are awaiting Friday's employment report from the government for confirmation that the labor market is improving.

The Labor Department is expected to report a 148,000 job increase in January, compared to 113,000 the prior month. Unemployment is expected to have notched up to 9.5% in January, compared to 9.4% the prior month.

"The market is consolidating a two-day run and waiting for the jobs report on Friday," said Burt White, chief investment officer with LPL Financial in Boston.

White said investors are also focusing on commodity prices as "chaos events" around the world threaten to disrupt supply chains.

"There is bad weather in Australia and the U.S., and there is still concern about the Suez Canal in Egypt," he said.

In Australia, Cyclone Yasi, a Category 5 storm, the highest designation on Australia's classification system, made landfall late Wednesday night, local time.

Sugar futures surged to a 30-year high as investors worried that Yasi could ravage Australia's crops. Consumer commodities such as cocoa and cotton also rose, as well as agricultural products like wheat and corn.

Oil futures, which spiked last week when turmoil erupted in Egypt, edged near $91 per barrel.

Meanwhile, investors did some selective buying of companies that reported quarterly results.

Companies: After the closing bell, Visa (V, Fortune 500) reported first-quarter earnings per share of $1.23, which was 2 cents better than expected. Sales rose 14% to $2.24 billion, versus a forecasted $2.23 billion.

News Corp (NWSA) said late Wednesday that it earned 29 cents per share, excluding certain costs, in the company's fiscal second quarter. Analysts surveyed by Thomson Financial were expecting 28 cents per share. Sales were $8.7 billion, in-line with expectations. Earlier today, CEO Rupert Murdoch unveiled "The Daily," his hotly anticipated iPad newspaper.

Before the market opened, Time Warner (TWX, Fortune 500) posted fourth-quarter earnings Wednesday that beat Wall Street expectations, driven in part by a recovering advertising market. Shares of Time Warner, the parent of CNNMoney and Fortune, were up 8%.

Shares of video game company Electronic Arts (ERTS, Fortune 500) jumped nearly 16%, a day after they reported a 75% jump in quarterly earnings and announced a stock buyback.

Mattel (MAT, Fortune 500) shares rose 1%, after the toymaker reported fourth-quarter results that beat analysts' expectations and raised its quarterly dividend payment.

Broadcom (BRCM, Fortune 500) fell more than 5%, after the semiconductor company reported quarterly results that met expectations, but issued guidance that was slightly below Wall Street consensus.

Toyota (TM) shares gained 2%, after reporting an almost 24% rise in January sales Tuesday. The Japanese automaker also said late Tuesday that it is offering "voluntary exit packages" to certain employees, as part of a restructuring plan.

Shares of Borders Group (BGP) plunged more than 35% Tuesday before the market close, and were down 19% to 38 cents early Wednesday on reports that the bookseller is close to filing for bankruptcy.

Economy: In Washington, the Senate Budget Committee met for the second day of hearings on the economic outlook, tax reform and challenges to the economic recovery.

World markets: European stocks ended mixed. Britain's FTSE 100 ticked up 0.7%, while the DAX in Germany was flat and France's CAC 40 slipped about 0.1%.

Asian markets finished with gains. The Hang Seng in Hong Kong and Japan's Nikkei both rallied 1.8%. Shanghai's market was closed for the first day of the week-long lunar new year holiday.

Currencies and commodities: The dollar fell against the British pound, but rose versus the euro and the Japanese yen.

Oil for March delivery gained 19 cents to $90.96 a barrel.

Gold futures for April delivery fell $3.10 to $1,336.80 an ounce.

Bonds: The price on the benchmark 10-year U.S. Treasury edged lower, pushing the yield up to 3.49% from 3.44% late Tuesday.