Wall Street: Jittery ahead of Fed
Stocks end session mixed as Wall Street plays it safe ahead of two-day central bank meeting, more economic and earnings reports.
NEW YORK (CNNMoney.com) -- Stocks were barely changed Monday as jitters ahead of the Federal Reserve's two-day policy meeting countered a flurry of merger activity and a drop in the price of oil.
The tech-heavy Nasdaq composite (up 5.60 to 2,441.09, Charts) gained 0.2 percent.
Stocks rose early in the session following a string of merger news and a slide in oil prices.
But worries on Wall Street about a glut of economic and earnings news later in the week and the Federal Reserve's two-day policy meeting forced investors to play it safe. A run up in Treasury bond yields didn't help.
"I think people don't want to overextend themselves until they get a better idea as to what the Fed might be doing," said Sam Stovall, chief investment strategist with Standard & Poor's.
The Fed is widely expected to hold tight at the conclusion of its meeting. Nonetheless, investors were jittery ahead of the news.
On the move
In deals news, Merrill Lynch (down $2.14 to $92.39, Charts) said it is buying First Republic Bank (up $15.33 to $53.63, Charts) for $1.8 billion. Citigroup (down $0.61 to $54.06, Charts) is buying Egg Banking from Britain's Prudential PLC in a $1.13 billion deal.
Bowater (up $5.29 to $27.44, Charts) and Abitibi Consolidated (up $0.69 to $3.33, Charts) said they will merge, with shareholders of the two paper companies trading their holdings for stocks in the combined firms.
Meanwhile, a pair of education companies agreed to be taken private. Over the weekend, Laureate Education (up $6.39 to $60.80, Charts) agreed to a $3.1 billion deal with a group that included its CEO. Meanwhile, on Monday, Educate (up $0.20 to $7.81, Charts) agreed to a $344 million management-led buyout.
In other news, Intel and IBM both said separately over the weekend that they are each developing smaller, faster chips. Both Intel (up $0.36 to $20.89, Charts) and IBM (up $1.09 to $98.54, Charts) stock rose Monday.
Nearly one-fourth of the S&P 500 is due to report results this week. Currently, earnings are on track to have risen about 10 percent from the same quarter a year ago, according to Thomson Financial. That's a blended figure, combining reported and expected results.
Market breadth was positive. On the New York Stock Exchange, winners beat losers 6 to 5 on volume of 1.31 billion shares. On the Nasdaq, advancers beat decliners 4 to 3 on volume of 1.71 billion shares.
Wall Street looks ahead
Possibly the most important item of the week for Wall Street is the Fed's two-day meeting where policymakers are widely expected to hold a key short-term interest rate steady at 5.25 percent, as they have done so for the last four meetings.
Investors will be paying close attention to what the bankers have to say about the economy and the future direction of interest rates in its accompanying statement.
The central bank is scheduled to announce a decision on interest rates at around 2:15 p.m. ET Wednesday.
"I don't think the Fed will surprise us," said Art Hogan, chief market analyst at Jefferies & Co. "They are not going to move on interest rates and the statement probably can't get more hawkish."
Concerns about a host of economic reports due out later this week, including the January employment report and fourth-quarter GDP numbers also prompted investors to play it safe Monday.
Treasury prices fell, boosting the yield on the benchmark 10-year note to 4.89 percent from 4.87 percent late Friday.
In currency trading, the dollar rose to a four-year high versus the yen and fell versus the euro.
COMEX gold for March delivery fell $1.60 to settle at $649.10 an ounce.