* Second-quarter wage growth smallest in 33 years
* Wage data supports argument for Dec rate hike
* Exxon, Chevron fall as weak oil price hurts profits
* Indexes: Dow down 0.16 pct, S&P flat, Nasdaq up 0.18 pct (Updates to afternoon)
By Noel Randewich
July 31 (Reuters) - Wall Street was mixed on Friday as a drop in energy companies' stocks was offset by expectations the U.S. Federal Reserve may delay an interest-rate hike this year following weak wage data.
Exxon Mobil shares fell 3.5 percent while Chevron was down 3.9 percent after reporting poor quarterly earnings due to weak oil prices.
U.S. labor costs in the second quarter recorded their smallest increase in 33 years, with the Employment Cost Index edging up a less-than-expected 0.2 percent.
"The magnitude of the miss was definitely a bit of a surprise, especially as people were really gearing up for a September hike. This definitely puts a lower probability on that," said Stanley Sun, interest rate strategist at Nomura Securities International in New York.
Earlier in the week, positive comments by the Fed about the economy had been considered by many investors as a signal that a rate rise could come as early as September.
At 2:05 p.m., the Dow Jones industrial average fell 0.16 percent to 17,717.06. The S&P 500 was down a marginal 0.02 percent at 2,108.13 and the Nasdaq Composite added 0.18 percent to 5,138.08.
Six of the 10 major S&P 500 sectors were higher with the utilities index's 1.22 percent rise leading the advancers.
The drop in Exxon and Chevron as well as weak oil prices amid oversupply concerns contributed to a 2.33 percent decline in the energy index.
"It's all about rotation. That's what this market has been about since we've been in such a tight trading range this year," said Dennis Dick, head of markets structure and a proprietary trader at Bright Trading LLC in Las Vegas.
With more than half of the S&P 500 companies having reported, analysts expect overall earnings to edge up 0.9 percent and revenue to decline 3.3 percent, according to Thomson Reuters data.
Coca-Cola Enterprises jumped 12.65 percent after a Wall Street Journal report said the independent Coca-Cola bottling company is in merger talks with two European bottlers.
Advancing issues outnumbered decliners on the NYSE by 2.25 to 1. On the Nasdaq, that ratio was 1.79 to 1, favoring advancers.
The benchmark S&P 500 index was posting 40 new 52-week highs and 8 new lows; the Nasdaq Composite was recording 89 new highs and 64 new lows. (Additional reporting by Tany Agrawal; Editing by Bernadette Baum)