U.S. stocks held little moved on Monday, with the Dow industrials coming back from a one-month low, as investors looked to economic reports, earnings and the Federal Reserve's mid-week policy decision.
"The recent trading pattern is when we go down, we tend to come back. Every sell off has been a buying opportunity," said JJ Kinahan, chief strategist at TD Ameritrade.
Dollar Tree rose after saying it would acquire rival Family Dollar Stores; Zillow fell after saying it would acquire rival online real estate site Trulia for $3.5 billion in cash and stock; AcelRx Pharmaceuticals declined after failing to win approval from the Food and Drug Administration for its pain treatment Zalviso; Tesla Motors jumped after the Nikkei newspaper reported the electric-car maker and Panasonic had reached an accord for the latter to invest in a U.S. battery factory.
"We had some recent weakness in economic data, most notably in housing numbers, and also geopolitical risks are causing some problems for the markets in general," said James Liu, global market strategist at J.P. Morgan Funds.
That said, "we still still like stocks for the rest of the year; the economy is going to continue to improve, and earnings growth is actually looking quite strong. About 60 percent of the S&P 500 have reported, and operating earnings growth is about 10 percent year over year," Liu said.
"It's a buy-the-dip market for U.S. stocks," Liu added.
Stocks finished well off session lows that had the Dow down as much as 82 points.
"The market is slowly grinding higher as the day has worn on as we anticipate catalysts that are probably more important than what we learned about today," Art Hogan, market strategist at Wunderlich Securities, said of data later in the week that includes second-quarter gross domestic product and the July payrolls report.
The gained half a point to 1,978.91, with utilities faring best and consumer staples down the most among its 10 major sectors.
The Nasdaq declined 4.65 points, or 0.1 percent, to 4,444.91.
For every three stocks on the rise, roughly four fell on the New York Stock Exchange, where 589 million shares traded. Composite volume neared 2.8 billion.
"The housing numbers continue to baffle people, you'd like to see some consistency in housing that matches up with employment," Kinahan said of data from the National Association of Realtors that had pending-home sales down 1.1 percent in June.
"It's all about the economic data this week, and we're hearing from the Feds on Wednesday," said Peter Cardillo, chief market economist at Rockwell Global Capital.
The Fed's next policy move comes at the end of a two-day session on Wednesday, with the central bank expected to cut its monthly asset purchases another $10 billion to $25 billion.
"The message is going to be a bit more hawkish. I don't see a change in the outlook in terms of economic activity, but they'll also include the risk factors to the economy, including the accelerating activity related to Russia and the impact on the European community," said Cardillo of the separatist war in Ukraine.
Financial-data firm Markit reported activity in the U.S. services sector held at its highest level in four-and-a-half years in July, although readings for new business and employment growth softened.
—By CNBC's Kate Gibson
Coming Up This Week:
Earnings: Merck, Pfizer, American Express, Twitter, Amgen, BP, UBS, Deutsche Bank, Aetna, UPS, Panera, Dreamworks, US Steel, Anadarko, Marriott, Express Scripts, Newmont Mining, Buffalo Wild Wings, Ruby Tuesday, Corning, Eaton, Illinois Tool Works, March and McLennan, Sirius XM, NY Times, AK Steel, Owens-Illinois
FOMC meeting begins
9:00 a.m. S&P/Case-Shiller HPI
10:00 a.m. Consumer confidence
10:00 a.m. Housing vacancies
1:00 p.m. $35 billion 5-year note auction
Earnings: Barclays, British American Tobacco, Goodyear Tire, SodaStream, Southern Co, Phillips 66, Thomson Reuters, Nextel, Valero Energy, Tesoro, Hess, Humana, AllianceBernstein, Booz Allen Hamilton, Carlyle Group, Samsung, Kraft Foods, Whole Foods, MetLife, Yelp, Weight Watchers, Shutterfly, Taubman Centers, AMC Entertainment, Boston Beer, Murphy Oil, Cabot, Western Digital, Whiting Petroleum, Agnico Eagle Mines, Allstate, Akamai, Hartford Financial
7:00 a.m. Mortgage applications
8:15 a.m. ADP
8:30 a.m. Q2 GDP
8:30 a.m. PCE Q2
11:30 a.m. 2-year floating rate note auction
1:00 p.m. $29 billion 7-year note auction
2:00 p.m. Fed statement
Earnings: Exxon Mobil, Conoco Phillips, Diageo, Occidental Petroleum, Royal Dutch Shell, Public Storage, Siemens, MasterCard. A-B InBev, AstraZeneca, Sanofi, Tesla, Expedia, GoPro, LinkedIn, Time Warner Cable, Alcatel-Lucent, Apache, Teva, Delphi Automotive, Ball Corp, Becton Dickinson, CME Group, Hyatt, Colgate-Palmolive, Kellogg, Marathon Petroleum, Mosaic, Newell Rubbermaid, McKesson, PG&E, Sony, Avon Products, Beazer Homes, Fortress Investments, Scana, Generac, DirecTV, 3-D Systems, SunPower, Seattle Genetics
8:30 a.m. Jobless claims
8:30 a.m. Employment cost index, 2Q
9:45 a.m. Chicago PMI
Earnings: Procter and Gamble, Chevron, CBOE, Axa, Calpine, Clorox, ArcelorMittal, Weyerhaeuser
Monthly vehicle sales
8:30 a.m. Employment report
8:30 a.m. Personal income and spending
9:55 a.m. Consumer sentiment
10:00 a.m. ISM Manufacturing
10:00 a.m. Construction spending
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