Stocks finish little changed ahead of Fed rate meeting

NEW YORK — Wall Street finished little changed Monday as investors turned cautious ahead of the Federal Reserve's two-day policy meeting, which starts today.

Stocks advanced for most of the session, then pulled back in the final minutes of trading.

Investors appeared to be waiting for the Fed to make the next move. Policymakers are expected to cut interest rates by a quarter point Wednesday, then leave them steady for the rest of the year to help ward off inflation.

"Investors are holding their breath for the Fed," said Jack A. Ablin, chief investment officer at Harris Private Bank. "The direction of Fed policy hangs in the balance, and there are people like me that hope the central bank quits sooner rather then later."

Also gaining attention, crude spiked to near $120 a barrel in overnight trading, then gave up some gains to settle up 23 cents at $118.75 a barrel on the New York Mercantile Exchange.

The dollar was mixed against other major currencies, while gold prices were higher.

In corporate news, Kerkorian's investment company, Tracinda Corp., said it plans to offer $8.50 per share in cash for up to 20 million additional shares of Ford. Ford rose 71 cents, or 9.5 percent, to $8.21.

Continental Airlines shares fell 26 cents to $16.96 after the airline announced it wasn't interested in completing a deal. The decision stunned United's parent, UAL Corp., which had been in advanced talks with Continental and expected to complete a deal by early May. United shares fell 40 cents, or 2.6 percent, to $14.81.

Some observers saw the dealmaking as an encouraging sign that companies are still willing to make mergers and acquisitions happen — and that many might do so while valuations still look cheap.

"What is happening is that people are thinking the Fed is keeping the economy going, and this is a good opportunity to do some inexpensive shopping," said Scott Fullman, director of derivatives investment strategy for WJB Capital Group in New York. "There has been a bit of a concern over the past few months that we haven't been seeing enough M&A."

In other corporate news, health insurer Humana said that increased Medicare Advantage membership helped drive its first-quarter profit above Wall Street's expectations. The company also raised its forecast for the year. The stock rose $1.50, or 3.3 percent, to $46.38.

Visa Inc., the world's largest credit and debit card processor, said after the closing bell Monday that its earnings increased 28 percent in the first quarter as customers charged more to their cards. Investors appeared disappointed that Visa's results weren't stronger. The stock fell more than 3 percent in after-hours trading, after rising 53 cents to finish the regular session at $75.63.

The Russell 2000 index of smaller companies advanced 3.49, or 0.48 percent, to 725.37.

Advancing issued outpaced decliners by about a 3-to-2 margin on the New York Stock Exchange, where volume came to 1.21 billion shares compared with 1.45 billion shares traded Friday.

Overseas, Japan's Nikkei stock average rose 0.22 percent. Britain's FTSE 100 closed down 0.02 percent, Germany's DAX index added 0.42 percent, and France's CAC-40 rose 0.69 percent.

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