* Investors look ahead to Fed meeting, elections
* Oil service stocks rally on Baker Hughes profit
* Wilmington Trust weighs on regional banks, to be bought
* Dow, S&P up 0.1 pct, Nasdaq down 0.1 pct
* For up-to-the-minute market news see []
(Updates to close)
By Ryan Vlastelica
NEW YORK, Nov 1 (Reuters) - Investors were reluctant to
make big bets ahead of two events that could dictate the stock
market's direction for the rest of the year and beyond, leaving
shares little changed on Monday.
The benchmark S&P 500 index rose 12.9 percent since the
start of September on hopes for Republican gains in Tuesday's
elections and a Federal Reserve announcement of monetary easing
on Wednesday. With those events imminent, trading volume was
light and a 1 percent early rally was erased as investors
turned cautious.
About 7.105 billion shares traded on the New York Stock
Exchange, the American Stock Exchange and Nasdaq, below the
year-to-date daily average of 8.73 billion. The CBOE Volatility
index <.VIX>, the market's favorite anxiety gauge, rose for the
sixth straight day, a sign investors were boosting bets on
further gyrations in the near term.
"We had a handful of positive macroeconomic data points,
which contributed to the better tone in markets today, but the
lack of follow-through underscores that Republican gains and an
expansion of the Fed balance sheet are expected," said Barry
Knapp, managing director of equity research at Barclays Capital
in New York.
U.S. factory activity in October expanded and construction
spending rose unexpectedly in September, reports showed. Other
data showed manufacturing in China expanded at the fastest pace
in six months in October. For details, see []
[].
Oil service stocks were among the leaders after Baker
Hughes Inc <BHI.N> reported a third-quarter profit that beat
expectations. The stock rose 5.2 percent to $48.73 while the
Oil Service sector <.OSX> was up 0.7 percent. []
M&T Bank Corp <MTB.N> rose 4.5 percent to $78.12 after news
it would buy Wilmington Trust Corp <WL.N> in a deal worth $351
million. Shares of Wilmington fell 42.5 percent to $4.09 and
weighed on regional banks. []
The Dow Jones industrial average <> was up 6.13 points,
or 0.06 percent, at 11,124.62. The Standard & Poor's 500 Index
<.SPX> was up 1.12 points, or 0.09 percent, at 1,184.38. The
Nasdaq Composite Index <> was down 2.57 points, or 0.10
percent, at 2,504.84.
If the election ends in the Republican Party taking control
of the House, as polls indicate, the Obama administration's
ability to enact its agenda would be in jeopardy. Among the
main Obama-backed laws recently enacted were overhauling
healthcare and financial regulation.
Traders said the energy sector could flourish after
Republican gains as there will be less chance of increased
regulation. []
The Fed is expected to announce on Wednesday it will
relaunch heavy bond buying to stimulate an anemic economy. Most
analysts expect the size and the scope of asset purchases to be
about $100 billion a month, starting with a plan to buy $500
billion in bonds between now and early 2011.
"If things don't come out as expected, there could be
significant downside because there's so little liquidity in the
markets," said Mike Holland, who oversees more than $4 billion
as chairman of Holland & Co in New York. "Investors have priced
in certain expected benefits from the Fed and elections, and
what markets are squaring away now are any possible
surprises."
On the Dow, Caterpillar <CAT.N> rose 0.9 percent to $79.27
while Exxon Mobil <XOM.N> climbed 0.7 percent to $66.95.
Weighing on the Nasdaq was Amazon.com <AMZN.O>, down 1.6
percent at $162.62. The stock fell 2.3 percent last week but
was up 32 percent from the beginning of September through the
end of October.
JPMorgan Chase & Co <JPM.N> fell 0.6 percent to $37.42
after ProPublica, an investigative journalism website, said the
Securities and Exchange Commission is investigating whether the
bank adequately disclosed that a hedge fund helped select
assets for a $1.1 billion package of subprime mortgages while
also betting against portions of the deal. []
Advancing stocks outnumbered declining ones on the NYSE by
a ratio of 15 to 14, while on the Nasdaq, about 12 stocks fell
for every seven that fell.
(Editing by Kenneth Barry)
