US STOCKS-Markets little changed after recent rally

* AIG selling foreign life unit to MetLife for $15.5 bln

* McDonald's same-store sales up 4.8 pct in Feb

* HP lowers Q1 results because of litigation

* Indexes: Dow flat, S&P, Nasdaq up 0.1 pct

* For up-to-the-minute market news, click [STXNEWS/US] (Updates to opening trade)

By Ryan Vlastelica

NEW YORK, March 8 (Reuters) - U.S. stocks were flat in early trading on Monday after a rally last week that saw the Nasdaq close at an 18-month high after encouraging jobs data.

American International Group Inc <AIG.N> rose 6.6 percent to $29.95 after it agreed to sell its Alico foreign life insurance unit to MetLife Inc <MET.N> for about $15.5 billion. For details, see: [ID:nN08154999]

McDonald's Corp <MCD.N> advanced 1.8 percent to $64.82 after the hamburger chain, a Dow component, reported that February same-store sales increased 4.8 percent. [ID:nN08166766]

"The momentum is certainly in favor of the bulls right now, but upside seems somewhat limited, given how much we've come up recently," said Bruce Bittles, chief investment strategist at Robert W. Baird & Co in Nashville.

The Dow Jones industrial average <.DJI> was up 0.68 points, or 0.01 percent, at 10,567.10. The Standard & Poor's 500 Index <.SPX> rose 0.52 points, or 0.05 percent, at 1,139.22. The Nasdaq Composite Index <.IXIC> added 1.85 points, or 0.08 percent, at 2,328.18.

Applied Materials Inc <AMAT.O> gained 0.6 percent to $12.36 after its board approved a dividend increase and $2 billion stock buyback program.

Late Friday, Hewlett-Packard Co <HPQ.N> revised lower its first-quarter profit by 3 cents per share due to litigation involving the EDS business, which it bought in 2008. Hewlett-Packard, a Dow component, slipped 0.6 percent to $51.72. [ID:nN0565021]

On Friday, the government said 36,000 U.S. jobs were lost in February, compared with forecasts for 50,000, resulting in a run-up that pushed the Dow and S&P to six-week closing highs. (Editing by Jeffrey Benkoe)