NEW YORK (CNN/Money) - Stocks headed for a flat to slightly higher start Monday as investors had little reaction to a better reading on manufacturing activity in the New York region and a slightly lower number on business inventories.

They also awaited a report on industrial production and ahead of the Fed meeting Tuesday and found some relief in DaimlerChrysler's union deal and an upgrade of Applied Materials.

At 8:40 a.m. ET, futures pointed to a flat to higher start for the major indexes.

"It's been very quiet this morning. We have a lot of economic numbers out this week that people will be focusing on, and there is the Fed tomorrow," Steve Previs of Jefferies International told Reuters.

The government said business inventories for July slipped 0.1 percent, down from a 0.1 percent rise in June and better than economists expected gain of 0.1 percent.

Separately, the Empire State index, which looks at economic activity in New York, came rose to 18.35 -- a better jump than expected -- in September. Economists expected the index to rise to 12 from 10 in August.

Economists surveyed by Briefing.com expect industrial production -- also due before the markets open -- to have risen 0.3 percent in August, a little weaker than the 0.5 percent boost in July. Capacity utilization is seen increasing to 74.7 percent from 74.5 percent.

Meanwhile, investors looked ahead to the Federal Reserve Open Market committee's meeting Tuesday. While economists expect that the Fed will leave the federal funds rate at 1 percent, they eagerly awaited any comments the central bank might make on the state of the economy. They also will look for indications of when the Fed might decide to tighten in future months.

Investors have been keeping a close eye on economic reports in recent months, hoping for stronger signs of a pick-up in business spending or hiring, but have been disappointed lately by mediocre data. Stocks have seen strong gains since the beginning of the year, riding high on investors' hopes for signs of an economic recovery in the second half of the year.

On the corporate front, DaimlerChrysler (DCX: Research, Estimates)'s U.S. unit reached an agreement on a new contract with the United Auto Workers early Monday. But talks continue between the union and the two other Big Three carmakers, General Motors (GM: Research, Estimates) and Ford Motor (F: Research, Estimates).

Among U.S. stocks trading in Europe, GM was about 1 percent higher and Ford was up 2.5 percent. DaimlerChrysler's shares inched 8 cents higher to $38 ahead of the opening bell.

Techs also remain in focus Monday after some busy days last week.

Merrill Lynch upgraded its investment rating on Applied Materials (AMAT: Research, Estimates) to "buy" from "neutral" and raised its 2004 earnings estimate for the chip equipment maker. Shares of Applied Materials rose 2.7 percent in pre-market trading on Instinet early Monday. Shares of top chipmaker Intel (INTC: Research, Estimates) also lifted edged higher ahead of the open.

Meanwhile, oil heavyweights ExxonMobil (XOM: Research, Estimates) and ChevronTexaco (CVX: Research, Estimates) are expected to submit preliminary bids to buy a 25-percent stake in the Russian oil producer YukosSibneft, according to the Wall Street Journal. ExxonMobil share tipped lower in European trading.

The Dow Jones industrial average begins the week at 9,471.55, having slipped 0.3 percent last week; the blue-chip indicator was up almost 12 points Friday. The Nasdaq composite index is at 1,855.03, down 0.1 percent last week but up nearly 9 points Friday.

With Japan's markets closed for a holiday, other Asian-Pacific stocks ended mixed; South Korea led the decliners after a typhoon killed at least 87 people. European markets were mostly higher around midday there. (Check the latest on world markets.)

Treasury prices inched lower in early trading, sending the 10-year note yield up to 4.28 percent from 4.25 percent late Monday. The dollar gained against the yen and euro.

Brent oil futures rose 17 cents to $26.54 a barrel in London, where gold edged higher in early trade.  

-- from staff and wire reports