Stocks were little changed in choppy, light trading on Wednesday as investors weighed high expectations about an upcoming euro zone summit against headline-driven selling.

An agreement earlier in the week between Germany and France on tighter fiscal controls for the euro zone had triggered buying, but expectations may have gone too far, analysts said.

Comments from an unnamed German official that Berlin was increasingly pessimistic about the chances of a deal during the summit on December 9 took the winds out of a two-day U.S. stocks rally.

Still, the market has been resilient, with bearish developments, including Standard & Poor's euro zone downgrade warning on Monday, failing to trigger massive selling.

I think the hopes (for a deal in the summit) are certainly still there. There's a belief in the marketplace that the euro zone doesn't have a death wish, said Art Hogan, managing director at Lazard Capital Markets in New York.

There is today's news and we started the week with S&P threatening to downgrade. In another time the market would be down much more than it is.

Trading volume was very light, characteristic of the wait-and-see mode Hogan described ahead of the summit.

The Dow Jones industrial average <.DJI> was up 26.98 points, or 0.22 percent, at 12,177.11. The Standard & Poor's 500 Index <.SPX> was down 1.18 points, or 0.09 percent, at 1,257.29. The Nasdaq Composite Index <.IXIC> dipped 5.57 points, or 0.21 percent, at 2,643.99.

French officials said French and German leaders will not leave the weekend summit until a powerful deal was reached. They want to impose mandatory penalties on nations that exceed deficit targets, a plan backed by U.S. Treasury Secretary Timothy Geithner, who is on a trip to Europe.

Among individual stocks, Martha Stewart Living Omnimedia Inc jumped 33.7 percent to $4.17 after J.C. Penney Co Inc agreed to buy a 16.6 percent stake.

Men's Wearhouse Inc's shares jumped 16.5 percent to $31.67 after the clothing retailer reported quarterly profit topped expectations.

Declining stocks outnumbered advancers on the New York Stock Exchange by a ratio of about 5-to-4, while on the Nasdaq, about two stocks fell for every one that rose.

(Reporting by Rodrigo Campos; editing by Jeffrey Benkoe)

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