US STOCKS-Wall St flat at record levels, valuations seen as reasonable

* S&P 500 coming off first close above 2,000

* Upswing seen as intact but volume has been light

* Tiffany rises after results, Chico's lower

* Indexes: Dow, S&P flat, Nasdaq down 0.1 pct (Updates to open)

By Ryan Vlastelica

NEW YORK, Aug 27 (Reuters) - U.S. stocks were flat on Wednesday as investors found few reasons to extend a rally that has taken indexes to repeated records, even though market valuations were not seen as unduly stretched.

The S&P 500 closed above 2,000 for the first time ever on Tuesday, while the Dow Jones industrial average also ended near a high. Both indexes have risen in 10 of the past 13 sessions, and the S&P has closed at a record 30 times this year, according to S&P Dow Jones Indices.

The gains have come without any correction since 2012, prompting analysts to call for a pullback, especially such potential headwinds as a reduction in Federal Reserve stimulus and the conflict between Ukraine and Russia. Much of the recent gains have come on low volume, suggesting investors are wary of jumping in at current levels.

Still, the S&P's price-to-earnings ratio is within historical norms, suggesting stocks are not overvalued, though further pronounced gains may be a challenge, given a dearth of positive catalysts.

"Earnings are good and rates are low, which creates the kind of environment that will keep pushing up markets gradually," said David Kelly, chief global strategist for JPMorgan Funds in New York. "I'm not concerned about valuation yet, especially compared to fixed income, but I see a yellow light instead of a green light."

The Dow Jones industrial average fell 7.23 points or 0.04 percent, to 17,099.47, the S&P 500 lost 1.06 points or 0.05 percent, to 1,998.96 and the Nasdaq Composite dropped 5.59 points or 0.12 percent, to 4,565.05.

Tiffany & Co (NYSE: TIF - news) rose 1.6 percent to $102.38 after reporting second-quarter revenue that topped expectations and raising its full-year profit view. Chico's FAS Inc fell 5 percent to $15.23 after its results.

Analog Devices Inc (NasdaqGS: ADI - news) was the biggest decliner on the S&P 500, down 3 percent to $50.62 a day after reporting its third-quarter results.

Digital Ally Inc (NasdaqCM: DGLY - news) fell 3.3 percent to $13.80 following a massive rally that has lifted shares 260 percent in August alone. The wearable camera maker has reported heightened demand since Aug. 9, when a white police officer shot and killed an unarmed black teen in Ferguson, Missouri, triggering weeks of protests.

The situation between Russia and Ukraine has faded as a market driver. In comments that could escalate the standoff, however, Ukrainian Prime Minister Arseny Yatseniuk said Kiev knew of plans by Russia to halt gas flows this winter to Europe. (Editing by Chizu Nomiyama)