US: Wall Street drifts with eyes on Fed; Intel drops

[NEW YORK] US stocks ended little changed in light volume on Monday, with traders eyeing a Federal Reserve meeting expected to result in an interest rate increase later this week.

The S&P 500 traded in its tightest range of the year, in and out of slight losses, while the CBOE Volatility index was on track to close at its lowest in more than a week.

Shares of Mobileye jumped nearly 30 per cent to a high of US$61.51 after chipmaker Intel agreed to buy the driverless technology maker for US$15.3 billion. Mobileye closed up 28.2 per cent at US$60.62 and Intel fell 2.1 per cent to US$35.16.

Investors looked ahead to the Fed's two-day meeting that starts on Tuesday. Traders saw a 94 per cent chance that the US central bank will lift interest rates by 25 basis points on Wednesday.

"Other than the Fed on Wednesday, I don't see anything going on to make any (investment) decisions on," said Paul Mendelsohn, chief investment strategist at Windham Financial Services in Charlotte, Vermont.

"Intel buying Mobileye is the story of the day, moving into that market sector," he said, adding that they advised some clients to "fade in" into Intel stocks.

"We think this is a very good support point," said Mr Mendelsohn.

Nvidia rose 2.8 per cent to US$101.85 while Delphi Automotive added 4 per cent to US$80.20. Both are involved in developing technology for cars.

The Dow Jones Industrial Average fell 21.5 points, or 0.1 per cent, to 20,881.48, the S&P 500 gained 0.87 point, or 0.04 per cent, to 2,373.47 and the Nasdaq Composite added 14.06 points, or 0.24 per cent, to 5,875.78.

After the bell, US-traded shares of Valeant Pharmaceuticals dropped 9.3 per cent to US$10.98 after investor William Ackman, who had been its biggest cheerleader for two years as the share price climbed and then plummeted, on Monday said his hedge fund had sold its entire position.

During regular trading hours, Citrix Systems jumped 6.8 per cent to US$84.93 after Bloomberg reported that the cloud-services company is working with advisers to seek potential suitors.

Wynn Resorts gained 4.8 per cent to US$104.30 after Morgan Stanley reiterated its "buy" rating and said the company could gain a meaningful market share in Macau.

About 6.18 billion shares changed hands in US exchanges, compared with the 6.93 billion daily average over the last 20 sessions.

Advancing issues outnumbered declining ones on the NYSE by a 1.54-to-1 ratio; on Nasdaq, a 1.68-to-1 ratio favored advancers.

The S&P 500 posted 39 new 52-week highs and three new lows; the Nasdaq Composite recorded 107 new highs and 48 new lows.

The S&P 500's average true range hit 5.9, its lowest of the year. The year-to-date average of that daily measure of volatility is 14.

REUTERS