* S&P 500 coming off biggest weekly decline since June
* Volume seen light on Veterans Day with bond market closed
* Titanium Metals, Jefferies Group soar on merger deals
* Dow off 0.2 pct, S&P off 0.2 pct, Nasdaq down 0.2 pct
By Angela Moon
NEW YORK, Nov 12 (Reuters) - U.S. stocks slipped on Monday, giving up modest gains in late morning trade on lingering worries about the upcoming debate on the fiscal cliff.
Adding to concerns, Barclays cut its year-end target for the S&P 500 to 1,325 and cited fiscal cliff issues as a reason.
The S&P 500 dropped 2.4 percent last week, the worst week for the benchmark index since June. It closed below its 200-day moving average for the first time in five months, and an extended run under that level could signal further losses ahead.
Trading volume is expected to be light, with the U.S. bond market and government offices closed on Monday for the Veterans Day holiday.
Last week's weakness was partly propelled by concerns about whether there will be a timely solution to avoid the fiscal cliff, a combination of government spending cuts and tax increases set to go into effect early next year unless Congress acts to change the law before then. Though most consider it unlikely that a deal will not be reached, analysts fear going over the cliff could push the economy back into recession.
"Hopefully, we'll be ready for the barrage of U.S. political soundbites and opinions on how to come to an agreement between Democrats and Republicans," said Peter Boockvar, managing director at Miller Tabak & Co, in New York.
"It may very well be the sole driver of stock performance into year-end with the economic consequences of such a deal being a focus only beginning in 2013."
The S&P 500 is still up about 10 percent for 2012, though recent months have eroded those gains. The Nasdaq has fallen for five straight weeks.
The Dow Jones industrial average was down 27.76 points, or 0.22 percent, at 12,787.63. The Standard & Poor's 500 Index was down 2.06 points, or 0.15 percent, at 1,377.79. The Nasdaq Composite Index was down 6.42 points, or 0.22 percent, at 2,898.45.
Apple Inc shares fell 0.6 percent to $543.93 after rising earlier on a global patent settlement with HTC Corp , as well as a 10-year licensing agreement. Apple's stock has been under pressure recently, dropping more than 20 percent from its 2012 high to enter bear market territory.
But some major acquisition news gave investors some reasons for optimism on Monday. Precision Castparts Corp offered to buy Titanium Metals Corp for $2.9 billion, while Leucadia National Corp agreed to buy investment bank Jefferies Group for $3.6 billion.
Shares of Titanium surged 42.3 percent to $16.46 while Jefferies climbed 12.8 percent to $16.09. Precision rose 5.6 percent to $181. In contrast, Leucadia fell 4.6 percent to $20.80.
Overseas, a report over the weekend showed China's export growth climbed to a five-month high, beating expectations and adding to recent data suggesting the country's seven straight quarters of slowing economic growth have ended.
In addition, the Greek parliament on Sunday approved an austerity budget for next year, a necessary step to unblock a new tranche of credit from the European Union and International Monetary Fund before the government runs out of cash. Still, investors remain concerned about whether the EU and IMF will agree to send the next tranche.
According to Thomson Reuters data through Friday, of the 449 companies in the S&P 500 that have reported earnings, 63.3 percent have topped expectations. But only 38.2 percent of companies have topped revenue expectations - well below the 62 percent average since 2002.