* Eyes on payrolls after ADP data tops expectations
* Rackspace shares up on report it may go private
* JPMorgan falls, CEO says will be treated for cancer
* Dow up less than 0.1 pct, S&P 500 and Nasdaq flat (Updates to afternoon trading)
By Ryan Vlastelica
NEW YORK, July 2 U.S. stocks were little changed on Wednesday as a positive read on private sector employment wasn't enough to get investors to keep buying ahead of the release of the closely watched June payrolls report on Thursday.
The Dow was 0.2 percent below the 17,000 level and approached within 15 points of the milestone, while the S&P 500 was less than 1.5 percent under its own landmark of 2,000. Both levels could serve as psychological barriers as the market trades at record highs.
The day was quiet, with volume low and the S&P's intraday range a mere 0.2 percent, the fourth narrowest since 1982, according to MKM Partners. The CBOE Volatility index fell 3.9 percent and remained at very low levels from a historical perspective.
U.S. private employers hired 281,000 workers in June, far exceeding expectations for 200,000, data from payrolls processor ADP showed. The number bodes well for the government payroll data before the market opens on Thursday. About 212,000 jobs are expected in that report, down from May's 217,000.
"The odds are pretty good that we'll break through 17,000 soon, but people are hesitant to put on big bets ahead of the payroll report, especially with market liquidity so thin," said Jim McDonald, who oversees $915 billion as chief investment strategist at Chicago-based Northern Trust Global Investments. "It makes sense to see a little consolidation after yesterday's gains."
The Dow Jones industrial average rose 11.14 points, or 0.07 percent, to 16,967.21, the S&P 500 remained unchanged at 1,973.32 and the Nasdaq Composite dropped 0.59 point, or 0.01 percent, to 4,458.06.
The S&P utilities sector suffered its biggest one-day decline since June 2013 and was by far the worst performer among the ten industry sectors. The group fell 2.2 percent as traders bet the data indicated a stronger economy and higher interest rates. Utilities, because of their typically steep dividend yields, are a market favorite in a low interest rate environment.
Constellation Brands was the S&P 500's biggest percentage gainer, up 2.9 percent to $90.91 after reporting earnings and revenue that beat expectations.
JPMorgan Chase fell 1.1 percent to $56.95 after Chief Executive Officer Jamie Dimon said he had been diagnosed with early stage throat cancer but would remain actively involved in the largest U.S. bank's business while in treatment. Shares were down 1.1 percent at $56.94.
In deal news, TechCrunch reported that Rackspace Hosting may take itself private, while Bloomberg reported that Shutterfly was working with boutique investment bank Qatalyst Partners to find buyers. Rackspace rose 6.2 percent to $35.83 while Shutterfly jumped 15 percent to $50.13.
(Editing by Bernadette Baum)