* Dow off 0.01 pct; S&P 500 up 0.3 pct; Nasdaq up 0.7 pct (Updates to midday)
By Chuck Mikolajczak
NEW YORK (Frankfurt: HX6.F - news) , May 19 (Reuters) - U.S. stocks mostly advanced onMonday as investors exercised caution over valuations after arun of mixed economic data, but another drop in bond yieldshelped support equities.
U.S.-listed shares of AstraZeneca tumbled 11.1percent to $71.39. The British drugmaker rejected a sweetenedand final merger offer from Pfizer that would havecreated the world's largest pharmaceuticals group. Pfizer sharesclimbed 1.1 percent to $29.45.
AT&T slid 1.9 percent to $36.03 and dragged on the Dowa day after the telecom company said it will acquire DirecTV for $48.5 billion, as it seeks fresh avenues of growthbeyond the maturing U.S. cellular business. DirecTV shares fell 1.4 percent to $84.92.
Equities have come under pressure recently with the S&P 500marking consecutive weekly declines for the first time sinceJanuary as investors have become concerned about the U.S.economy's growth prospects. Last week, readings on retail salesand consumer sentiment fell shy of expectations while labor andhousing data provided reason for optimism.
But with the yield on the 10-year U.S. Treasury note at 2.5 percent, investors may have been compelled towade into equities and help keep them afloat.
"Part of this - driven by where rates are at and bondscontinuing to rally - when you might look for a pullback in thestock market, that is making stocks look more attractive," saidStephen Massocca, managing director at Wedbush Equity ManagementLLC in San Francisco.
"It is maybe preventing a decline of which we are a littleoverdue in the stock market, from a valuation perspective."
The Dow Jones industrial average fell 1.93 points or0.01 percent, to 16,489.38. The S&P 500 gained 4.83points or 0.26 percent, to 1,882.69. The Nasdaq Composite added 29.79 points or 0.73 percent, to 4,120.38.
Small-cap stocks, often the first beneficiaries of growth,managed to rebound. The small-cap Russell 2000 index wasup 0.7 percent after three straight declines. The index hasseveral times approached correction territory, a decline of 10percent from a recent high, only to bounce back slightly.
Investors' defensive posture has been reflected by a sectorrotation into utilities, telecoms and energy, which haveoutperformed the broader S&P 500 over the past three months.
Campbell Soup Co fell 2.9 percent to $43.81 andranked as the S&P 500's worst performer. The world's largestsoup maker posted weaker-than-expected quarterly sales and cutits full-year sales forecast. (Editing by Bernadette Baum, Nick Zieminski and Jan Paschal)
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