US STOCKS-Wall Street flat as virus woes offset stimulus hopes

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* Twitter gains on J.P. Morgan upgrade
* Airline stocks fall after Southwest flags Q4 pain
* Nasdaq retreats after inching up to record high
* Dow and S&P 500 flat, Nasdaq up 0.04%

(Updates to market open)
By Ambar Warrick and Shreyashi Sanyal
Dec 16 (Reuters) - Wall Street moved within a tight range on
Wednesday as signs of the economic impact of the COVID-19
pandemic offset optimism over a stimulus package, with investors
keeping an eye on the last Federal Reserve meeting for the year.
Airline stocks retreated after Southwest Airlines Co LUV.N
flagged a higher cash burn in the fourth quarter, as well as
increased trip cancellations in December. Southwest's shares
fell 0.9%. Data showed U.S. retail sales fell 1.1% in November,
declining for a second straight month, as new coronavirus
infections and decreasing household income weighed on spending.
U.S. congressional leaders reported substantial progress
toward a spending bill late on Tuesday, while a string of media
reports suggested a deal to release more money into the economy
was imminent. The Fed is also expected to keep lending rates at near-zero
and signal their staying there for the foreseeable future at the
conclusion of their meeting later in the day. Markets are
anticipating an update on the Fed's bond-buying program.
"They might not have reached a deal yet, but are definitely
headed in the right direction and some sort of a deal will soon
be announced," said Peter Cardillo, chief market economist at
Spartan Capital Securities in New York.
"The market is going to be looking at the (Fed's)
bond-buying program. So while we get an overall dovish
communiqué, the key focus will be if the Fed is going to
indicate any pullback in using its tools."
While a mix of low interest rates and increased liquidity
have brightened the outlook for equities, headwinds from the
virus have sobered near-term expectations, despite the recent
launch of a vaccination program.
At 10:00 a.m. ET, the Dow Jones Industrial Average .DJI
was down 6.52 points, or 0.02%, at 30,192.79, the S&P 500 .SPX
was up 0.30 points, or 0.01%, at 3,694.92. The Nasdaq Composite
.IXIC was up 4.92 points, or 0.04%, at 12,599.98.
The Nasdaq fell after touching a record high shortly after
the open.
Utilities .SPLRCU and real estate .SPLRCL were the best
performing S&P 500 sectors on Wednesday.
Twitter Inc TWTR.N rose 5.5% after J.P. Morgan upgraded
its stock to "overweight", as the brokerage expects the social
media company to stage a significant rebound in online
advertising following a pandemic-fueled decline. Marijuana producers Aphria Inc APHA.TO APHA.O and rival
Tilray Inc TLRY.O gained 1.5% and 20.0%, respectively, after
the two companies agreed to combine their operations and create
the largest cannabis producer by sales. Advancing issues outnumbered decliners for a 1.20-to-1 ratio
on the NYSE and a 1.14-to-1 ratio on the Nasdaq.
The S&P index recorded 21 new 52-week highs and no new low,
while the Nasdaq recorded 107 new highs and seven new lows.