* Apple shares fall 1.4 percent after setback in Samsungcase
* Sprint volume surges, shares jump on Softbank deal reports
* Citigroup sees US stocks as "overweight"
* Indexes: Dow up 0.14 pct, S&P up 0.28 pct, Nasdaq up 0.10pct
(Updates to afternoon)By Atossa Araxia Abrahamian
NEW YORK, Oct 11 (Reuters) - U.S. stocks erased most gainsand were little changed on Thursday as a drop in Apple sharesafter a legal ruling dented broad market gains on a sign ofimprovement in the jobs market.
Apple
shares fell 1.4 percent to $632.25 after aU.S. appeals court overturned a preliminary injunction on thesale of Samsung Electronics Co Ltd's
Galaxy Nexussmartphone, dealing a blow to Apple Inc in a battle againstGoogle Inc's
increasingly popular mobile software.
"The tone was positive before the claims data, so it gave usa nice boost. But the reality sets in that these are just oneweek's figures and are subject to revision, so people haveturned back to some profit-taking," said Tim Ghriskey, chiefinvestment officer at Solaris Asset Management, Bedford HillsNew York.
"We are still at a very early cycle of earnings so there isnot much to take the market to the upside."
Earlier data showed initial jobless claims fell to theirlowest in more than four and a half years, dropping by 30,000 toa seasonally adjusted 339,000, against the 370,000 economistshad predicted.
In addition, Citigroup upgraded its stance on U.S. equitiesto "overweight," citing cheap equity valuations and aggressivecentral bank actions to stimulate the economy. Citigroup expectsglobal equity markets to rally 9 percent by the end of 2013.
Sprint Nextel
shares jumped 13 percent to $5.70 onnews that Japan's Softbank Corpmay buy a majoritystake in the wireless carrier. Clearwire Corp
, in whichSprint holds a majority interest, surged 38 percent to $1.79.MetroPCS
shares dropped 4.2 percent to $11.53
"The Sprint-Nextel deal shows there are deals to be had.Companies are looking to find ways to grow their footprint evenin this economy," said Brian Amidei, managing director andpartner at wealth management firm HighTower Advisors.
Sprint share trading hit record volumes before slowing downin the early afternoon and tempering the market's earlier gains.
The Dow Jones industrial average
was up 17.93points, or 0.13 percent, at 13,362.90. The Standard & Poor's 500Index
was up 4.02 points, or 0.28 percent, at 1,436.58.The Nasdaq Composite Indexwas up 3.04 points, or 0.10percent, at 3,054.83.
S&P 500 fell 2 percent over the past four days - its biggestdecline in four days since July. Analysts point to the long-termeconomic outlook, and concerns about slowing world growth.
"Markets hate ambiguity, and today's trading patterns are agood example of the larger ambiguous picture in the globaleconomy," said Steven Baffico, chief executive officer at FourWood Capital Partners in New York. "We are hyperreacting to bothgood and bad."
The jobless claims report follows a report last week thatshowed September's unemployment rate unexpectedly fell to 7.8percent.
Truck manufacturer Oshkosh
rallied 12 percent onnews that investor Carl Icahn had offered to buy all of itsshares for $32.50 a share. OshKosh advised shareholders to takeno action until further notice
Shares of supermarket chain Safeway Inc
fell nearly 5percent after it posted quarterly sales of $10.05 billion,missing Wall Street's $10.24 billion target. Competitor Walmart
was up 0.5 percent to $75.74 after hitting a 52-weekhigh on Wednesday and JC Penney
had its best day sincelate January, jumping 7 percent to $25.80 per share.(Editing by Kenneth Barry)
((atossa.abrahamian@thomsonreuters.com)(+1 646 2237089)(Reuters Messaging:atossa.abrahamian.thomsonreuters.com@reuters.net))
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