US STOCKS-S&P 500 holds steady at near 3-month high

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* Boeing rises on resuming 737 MAX production
* Twitter, Facebook drop amid threat of executive order
* Indexes: Dow up 0.05%, S&P up 0.06%, Nasdaq up 0.03%

(Updates to open)
By Medha Singh
May 28 (Reuters) - U.S. stocks were largely flat on
Thursday, with the S&P 500 holding at near three-month highs as
investors paused after a three-day rally, weighing hopes of a
swift economic recovery against underlying tensions between
United States and China.
Boeing Co BA.N climbed 3%, the most among the 30 blue-chip
Dow components .DJI , as the planemaker said it had resumed
production of its 737 MAX passenger jet at its Washington plant,
although at a "low rate". Its top supplier, Spirit AeroSystems SPR.N , edged up 0.9%.
The benchmark S&P 500 .SPX managed to close above the key
3,000 mark on Wednesday as growing evidence of a pickup in
business activity and massive amounts of stimulus drove hopes of
an economic recovery.
But analysts have warned that worsening ties between
Washington and Beijing over the handling of the coronavirus
outbreak and a new national security law in Hong Kong pose a
major threat to the stock market's strong recovery from the
crash earlier this year.
"I would prefer that the market not go up quite as fast
because the sharper it moves higher, the more vulnerable it
becomes to a pullback," said Randy Frederick, vice president of
trading and derivatives for Charles Schwab in Austin, Texas.
The Trump administration is crafting a range of options,
including targeted sanctions, new tariffs and further
restrictions on Chinese companies, according to U.S. officials
and people familiar with the discussions. President Donald Trump has promised action over Hong Kong by
the end of the week.
"What is happening with Hong Kong feels like the first frost
in a new Cold War," said Jasper Lawler, head of research at
London Capital Group.
Chipmakers .SOX , most of which have a large exposure to
China, were down 0.5%.
Meanwhile, the number of Americans filing for unemployment
benefits held above 2 million for a 10th straight week, while a
separate report showed GDP contracted at a bigger-than-expected
5% annualized rate in the first quarter, the deepest drop in
output since the 2007-09 Great Recession. Six of the 11 major S&P sectors were higher, with healthcare
.SPXHC leading gains.
At 9:50 a.m. ET, the Dow Jones Industrial Average .DJI was
up 11.87 points, or 0.05%, at 25,560.14, the S&P 500 .SPX was
up 1.70 points, or 0.06%, at 3,037.83, and the Nasdaq Composite
.IXIC was up 2.77 points, or 0.03%, at 9,415.13.
Memory chipmaker Micron Technology Inc MU.O dropped 4%
despite raising its revenue forecast for the third quarter.
Twitter TWTR.N and Facebook FB.O slipped 1.9% and 0.9%,
respectively, ahead of an expected order from Trump that would
review a law that has long protected the companies from being
responsible for the material posted by their users. Declining issues nearly matched advancers on the NYSE and
the Nasdaq.
The S&P index recorded 12 new 52-week highs and no new low,
while the Nasdaq recorded 36 new highs and five new lows.