(Reuters) - Wall Street was set to open little changed on Friday after a mixed U.S. payrolls report failed to confirm heightened expectations of a healing labor market.

The U.S. economy created 103,000 jobs in December, far below the forecast of 175,000. But overall employment for October and November was revised to show 70,000 more jobs than previously reported, while the unemployment rate dropped to 9.4 percent, the lowest since May 2009. For details see [ID:nN06134458]

Overbought levels on the S&P 500 .SPX opened the door to the possibility of declines after the disappointing data. Short-term technical support for the benchmark was found near 1,260, its 14-day moving average. The S&P closed at 1,273.85 on Thursday.

Economists had revised their forecasts higher after Wednesday's surprising strong ADP private-sector employment figures, which were triple forecasts.

"We are down from expectations, but with the adjustments to October and November nonfarm payrolls were actually adjusted higher," said Max Bublitz, chief investment strategist at SCM Advisors in San Francisco.

"We seem to struggle at that 1,275/1,280 on the S&P 500. I'd be surprised if we got through that today, but I don't see any big selloff."

S&P 500 futures rose 1.6 points, with fair value, a formula that evaluates pricing by taking into account interest rates, dividends and time to expiration on the contract, a bit higher. Dow Jones industrial average futures were up 11 points, and Nasdaq 100 futures dipped 1 point.

Facing a newly empowered Republican Party skeptical of the Federal Reserve's attempt to stimulate the U.S. economy, Fed Chairman Ben Bernanke may douse Wall Street optimism as he testifies before Congress later in the morning.

"The Fed likes to have their moves telegraphed, and they've already told us they will continue with QE2," said Kim Caughey Forrest, senior equity research analyst at Fort Pitt Capital Group in Pittsburgh.

"If (Bernanke) says anything away from that, that would surprise the markets."

The Pentagon has overhauled the Lockheed Martin Corp (LMT.N) F-35 fighter project for the second time in a year and will buy 41 Boeing Co (BA.N) F/A-18 combat planes over the next three years to offset slower Lockheed production.

The board of bailed-out insurer American International Group Inc (AIG.N) approved a dividend that assumes its recapitalization plan will close as soon as next week. AIG shares rose 2.9 percent to $62.20 in premarket trading.

Sara Lee Corp (SLE.N) is considering spinning off its meat and coffee businesses after rejecting a takeover bid from Brazil's JBS SA (JBSS3.SA), a source said.

U.S. stocks were mostly lower Thursday as soft retail sales and a sharp rise in the dollar sent both the Dow industrials .DJI and S&P 500 down 0.2 percent. But the Nasdaq Composite .IXIC rose 0.3 percent.

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