US STOCKS-Wall St set to open flat as market pauses after rally

* Bond markets closed for holiday, seen damping stocks trading

* Transocean (NYSE: RIG - news) reaches deal with Icahn over dividend

* ViroPharma (NasdaqGS: VPHM - news) shares soar, to be acquired by Shire (LSE: SHP.L - news) for $4.2 billion

* Indexes mixed: Dow up 6 pts; S&P up 0.2 pt; Nasdaq down 1.75 pts

By Angela Moon

NEW YORK, Nov 11 (Reuters) - Wall Street was set for a flat open on Monday as investors took a breather after the Dow and the S&P 500 indexes rose five weeks in a row, while trading volume was likely to be quiet due to the Veterans Day holiday.

While the overall market has been on the rise, technology and small cap stocks showed relative weakness in recent weeks. The S&P 500 rose more than 0.5 percent for the week, the Nasdaq lost 0.1 percent. The Russell 2000 index of mid- and small cap stocks rose 0.4 percent last week.

"Should technology take the reins and move above here, that will likely be the catalyst that leads the S&P 500 to new all-time highs." said Bryan Sapp, senior trading analyst at Schaeffer's Investment Research in Cincinnati, Ohio.

The Dow set a record and the S&P 500 benchmark index rose on Friday after an unexpectedly strong payrolls report, supporting the view the U.S. economy is stronger than previously thought.

But some investors are also concerned that the solid jobs report could prompt the U.S. Federal Reserve to start tapering its stimulus efforts earlier than expected. The market will look for more clues on Fed policy when Janet Yellen, nominated by President Barack Obama to succeed Fed Chairman Ben Bernanke, appears before the Senate Banking Committee on Thursday.

S&P 500 futures rose 0.4 point and were slightly higher than fair value, a formula that evaluates pricing by taking into account interest rates, dividends and time to expiration on the contract. Dow Jones industrial average futures rose 6 points while Nasdaq 100 futures fell 1.75 points.

U.S. government offices and bond markets are closed on Monday for Veterans Day and no major data or earnings are expected.

European shares edged higher as investors considered the implications of a strong U.S. jobs report. The FTSEurofirst 300 rose 0.1 percent at 1,296.86 points while the euro zone's blue-chip Euro STOXX 50 firmed 0.2 percent to 3,039.90 points.

Transocean Ltd shares rose 2 percent in premarket trade after the company said it reached an agreement with Carl Icahn in which the offshore driller will pay a $3 per share dividend and reduce the number of board seats.

Tesla Motors Inc (Xetra: A1CX3T - news) shares were up 1.9 percent in premarket trade after the stock suffered its worst week since early 2012.

Apple Inc (NasdaqGS: AAPL - news) is developing new iPhone designs, including bigger screens with curved glass and enhanced sensors that can detect different levels of pressure, Bloomberg reported on Sunday, citing an unnamed person familiar with the plans. The stock was up 0.3 percent in premarket trade.

London-listed Shire is buying ViroPharma (Dusseldorf: VPH.DU - news) for $4.2 billion, attracted by a pipeline of potentially lucrative drugs to treat rare diseases. ViroPharma shares jumped 26 percent in premarket trade.