* Coach advances dividend pay date to Dec. 27
* VIX 10-day internal volatility gauge lowest since 2007
* MetroPCS off as Sprint unlikely to make counter-offer
* Dow up 0.2 pct, S&P flat, Nasdaq off 0.2 pct
By Rodrigo Campos
NEW YORK, Dec 4 (Reuters) - U.S. stocks were little changed
in early trading on Tuesday as the market remains hostage to
negotiations in Washington on how to avert a "fiscal cliff" that
could push the U.S. economy into recession.
Republicans in Congress proposed steep spending cuts to
bring down the budget deficit on Monday but gave no ground on
President Barack Obama's call to raise taxes on the wealthiest
Americans, and the proposal was quickly dismissed by the White
Headlines about the back-and-forth preliminary proposals by
Republicans and Democrats have fixated the market. Still, many
investors expect the two sides to come up with a deal before the
year-end deadline, which could trigger a rally in equities.
"Support (for the market) is based on a belief that
Washington will come to some agreement before we go over the
fiscal cliff," said Art Hogan, managing director of Lazard
Capital Markets in New York.
Hogan added, "On the first show of flexibility from either
side, we'll get a relief rally."
Despite sudden moves in the market on the latest headlines
about the fiscal cliff in recent days, a measure of investor
anxiety has held surprisingly flat.
The CBOE volatility index, a gauge of market anxiety,
slipped to 16 and has not traded above 20 since July following
its 2012 high near 28 hit in June. The VIX's 10-day Average True
Range, an internal volatility measure, is at its lowest since
Obama will meet with U.S. governors at the White House on
Tuesday to talk about the fiscal cliff, a $600 billion package
of tax hikes and federal spending cuts that would begin Jan. 1.
The president is also expected to talk about the fiscal
cliff during an interview scheduled for 12:30 p.m. (1730 GMT) on
Coach became the latest company to advance the date
of its next dividend payment. Expectations of higher taxes on
dividends kicking in in 2013 have pushed many companies to pay
special dividends this year or advance their next pay-back to
The Dow Jones industrial average rose 27.92 points,
or 0.22 percent, to 12,993.52. The S&P 500 edged up 0.44
points, or 0.03 percent, to 1,409.90. The Nasdaq Composite
fell 4.44 points, or 0.15 percent, to 2,997.76.
Toll Brothers shares rose 1.8 percent to $33.01
after the largest U.S. luxury homebuilder reported a higher
quarterly profit and said new orders rose sharply.
MetroPCS Communications shares dropped 6.5 percent
to $10.07 after Sprint Nextel appeared unlikely to make a
counter-offer for the wireless service provider.
Shares of Pep Boys-Manny Moe and Jack were down 12.4
percent at $9.36 a day after the release of the auto parts