US STOCKS-Traders buy the Wall St dip, but nixed deals weigh
* Energy sector leads rebound in S&P 500
* Russia has 20,000 troops on Ukraine border -NATO
* Sprint, T-Mobile shares fall as Sprint drops bid
* Cognizant, Groupon shares down after results
* Indexes up: Dow 0.3 pct, S&P 0.3 pct, Nasdaq 0.3 pct (Updates to morning trading, recasts, adds comment)
NEW YORK, Aug 6 (Reuters) - U.S. stocks rose in morning trading on Wednesday after buyers stepped in as the S&P 500 hit a more than two-month low, but concern about an escalation of the Russia-Ukraine conflict and two nixed deals weighed on sentiment.
Energy shares attracted a lot of the buying as Brent crude bounced from a 9-month low and the S&P energy index, down in seven of the previous eight sessions, jumped 1.3 percent to be the best-performing of the top ten industry sectors.
Futures traded lower before the open after NATO said Russia has around 20,000 combat-ready troops on Ukraine's eastern border and could use the pretext of a humanitarian or peace-keeping mission to invade.
A further souring of relations between Russia and the West could hurt the European economy, already struggling to recover from a deep recession. Data on Wednesday showed German industrial orders dropped in June at their steepest rate since September 2011 and Italy's economy unexpectedly slid back into recession in the second quarter.
The situation with Russia "is certainly going to spook the market and we saw a little of that yesterday," said Randy Frederick, managing director of trading and derivatives for Charles Schwab in Austin, speaking of Tuesday's afternoon selloff.
"As far as the broad market goes, we haven't had a pullback of any size since April. Every time we see a little weakness, people tend to step in and buy, primarily because they have cash out there to put to work and there's not a lot of places for that," he said.
The Dow Jones industrial average rose 47.63 points or 0.29 percent, to 16,477.1, the S&P 500 gained 5.97 points or 0.31 percent, to 1,926.18 and the Nasdaq Composite added 14.49 points or 0.33 percent, to 4,367.33.
Time Warner Inc was the largest decliner on the S&P 500 after Rupert Murdoch's Twenty-First Century Fox withdrew its $80 billion offer to buy the media company. Time Warner shares slid 12.1 percent to $74.88 despite reporting better-than-expected results, while Fox rose 5.4 percent to $33.
Sprint fell 17.7 percent to $5.99 and T-Mobile dropped 6.1 percent to $31.85 after a proposed deal between them also fell through.
Walgreen Co shares fell 12.8 percent to $60.27 after it said it wouldn't use a full takeover of Europe's biggest pharmacy chain Alliance Boots to move its domicile overseas, following fierce criticism of such tax-cutting deals at home.
Shares of Cognizant Technology fell 13.9 percent to $43.02 after the IT services provider said it expected slower full-year sales growth than previously forecast.
Groupon shares tumbled 16.5 percent to $5.90 a day after it slashed its full-year profit outlook. (Editing by Bernadette Baum and Nick Zieminski)