* December payrolls much lower than expected, weather blamed
* Alcoa shares slide after results
* Dow off 0.1 pct, S&P 500 flat, Nasdaq up 0.1 pct
By Rodrigo Campos
NEW YORK, Jan 10 (Reuters) - U.S. stocks were little changed in volatile trading on Friday as a weaker-than-expected payrolls report was partly blamed on frigid weather, leaving traders in search of further clues on the state of the economy.
Equity futures sharply pared gains after data showed U.S. employers hired only 74,000 workers in December, the smallest increase since January 2011. The data setback was likely to be temporary, however, amid signs the number of hires may have been affected by cold weather conditions.
"The equity market recognizes this is probably a fluke and we should see a bounce back in January," said Paul Zemsky, head of asset allocation at ING Investment Management in New York.
He said the data showed wage inflation was subdued, giving the Federal Reserve leeway to keep rates low.
Investors continue to assess economic data through the eyes of the Fed, as they try to gauge how quickly it will reduce its monthly market-friendly stimulus.
"From a technical perspective the market continues to be a little bit overbought," Zemsky said. "We're in a consolidation period here, trading sideways to work off the overbought condition."
The Dow Jones industrial average fell 18.76 points, or 0.11 percent, to 16,426, the S&P 500 lost 0.81 points, or 0.04 percent, to 1,837.32 and the Nasdaq Composite added 2.619 points, or 0.06 percent, to 4,158.813.
Alcoa reported a massive quarterly loss on Thursday after recent declines in aluminum prices; its shares fell 6.5 percent to $10.
Sears Holdings Corp's shares fell 13.1 percent to $36.98 a day after the retailer reported steep declines in comparable-store sales at its Kmart and U.S. namesake chain for the crucial holiday season.
Shares of trucking company YRC Worldwide fell 21.9 percent to $12.24, a day after sliding 16 percent as workers represented by the Teamsters union rejected a contract extension that the company proposed, putting a plan to restructure its debt in jeopardy.
Target Corp said a massive payment card data breach that occurred during the first three weeks of the holiday shopping season affected up to 70 million people, more than double its previous estimate. Its shares fell 1.2 percent to $62.60.