By Caroline Valetkevitch

NEW YORK (Reuters) - U.S. stocks are unlikely to
break above a key technical level next week unless monthly jobs
data and consumer company results paint a more promising
picture of the recovery.

The Standard & Poor's 500 index has been stuck near
its 200-day moving average, a level used to determine market
direction, amid recent weak economic data and disappointing
outlooks from companies, including tech firms Nvidia Corp
and Symantec.

Options market activity points to more tech sector
volatility next week, while the Nasdaq had the poorest
performance of the three major indexes this week.

Among companies expected to report next week are Procter &
Gamble and Clorox whose results could give
another glimpse into the strength of consumer spending or its
lack.

But the government's non-farm payrolls report, due Friday,
looms large since sluggish job growth is considered the biggest
hurdle to advances by the economy and stocks.

The Labor Department report follows data Friday that showed
the pace of U.S. economic growth slowed in the second quarter.
The June labor report showed a fall in payrolls, both of which
raised concerns about the recovery for the rest of the year.

"We have been reducing our exposure to equities because we
are concerned that a weaker economy is going to continue
throughout the end of year," said Joseph Battipaglia, market
strategist, Stifel Nicolaus, Yardley, Pennsylvania.

KEY TECHNICAL BREAK

Analysts say a significant break above the S&P 500's
200-day moving average, currently around 1,114, would be a
bullish signal.

"The market has the potential to push higher again if we
can get through the 200-day moving average," said Michael
Sheldon, chief market strategist, RDM Financial, Westport,
Connecticut.

Chris Burba, short-term market technician at Standard &
Poor's in New York, noted that the 200-day moving average has
been nearly flat since late June, which supports the view that
investors should be cautious.

The U.S. economy has shown weakness in recent months after
a recovery from the worst recession since the 1930s, and
corporate results for the second quarter have been mixed.

Earnings growth for S&P 500 companies in the second quarter
is expected at 36 percent, while revenue growth is seen at
about 9.1 percent, according to Thomson Reuters data.

Options investors appear to be expecting more volatility in
the technology sector, which has heavily weighed on the market
this week, to continue.

The most active options on PowerShares QQQ Trust ETF
, an exchange-traded fund that tracks the benchmark
Nasdaq 100 <.NDX>, was the weekly put options at the $45
strike which expire on Aug 6. Weeklys are options listed with
approximately one week to expiration, different from
traditional options that have a life of months or years before
expiration.

"Puts are dominating in the QQQQ, both in weeklys and
regulars," said Ryan Detrick, senior technical strategist at
Schaeffer's Investment Research in Cincinnati, Ohio.

Regular put options at the August $45 and $46 strikes were
also seeing heavy volume. The ETF is currently down 0.4 percent
at $45.55.

Some options market analysts see more range-bound trading
ahead, with top end at 1,120 on the S&P 500 and the bottom end
at 1,065.

"In order to take out the upside of the trading range, we
need to see the majority of economic data next week to be
better than expected," said Stifel Nicolaus options market
strategist Elliot Spar in Shrewsbury, New Jersey.

In other key economic data next week, the Institute for
Supply Management's manufacturing report, due Monday, is
expected to show growth for a 12th straight month.
(Additional reporting by Doris Frankel and Angela Moon;
Editing by Kenneth Barry)