* Fed meeting in view, investors seek stimulus clarity
* Avago to buy LSI for $6.6 bln; AIG to sell unit for $5.4
* S&P 500 near all-time high, but below 14-day moving
* Indexes up: Dow 1 pct, S&P 0.8 pct, Nasdaq 0.7 pct
By Ryan Vlastelica
NEW YORK, Dec 16 U.S. stocks rose on Monday as
large deals boosted optimism after a steep decline last week,
though investors remained heavily focused on an upcoming Federal
Reserve policy meeting.
Equities are coming off their worst week in nearly four
months, a pullback that came on concerns the Fed may begin a
stimulus wind-down at its two-day policy-setting meeting that
ends Wednesday. The stimulus has been a major contributor to the
market's gains this year, and has been expected to keep a floor
under stock prices for as long as it continues.
Investors have been trying to gauge the timing of when the
central bank will start winding down its market-friendly bond
purchases, with many market participants expecting the Fed to
announce a tapering in March.
However, stronger economic data of late, including the
November payroll report, led some to believe the tapering could
come as soon as at the Fed's meeting this week. The Fed has said
it will slow the program when certain economic indicators meet
its growth targets.
"The market's direction has been biased towards the upside,
and there's some relief from last week's selling pressure," said
Mark Luschini, chief investment strategist at Janney Montgomery
Scott in Philadelphia.
"I was expecting hesitation going into the Fed, but I think
most accept that while it is possible we'll see some kind of
change in policy, it is unlikely."
Avago Technologies Ltd agreed to buy LSI Corp
for $6.6 billion, while American International Group Inc
said it would sell its aircraft-leasing business to
AerCap Holdings NV in a deal valued at about $5.4
Shares of Avago jumped 10 percent to $50.09 while LSI surged
39 percent to $10.96. AerCap surged 36 percent to $33.98 and AIG
rose 2.3 percent to $50.86.
The Dow Jones industrial average was up 154.90
points, or 0.98 percent, at 15,910.26. The Standard & Poor's 500
Index was up 14.08 points, or 0.79 percent, at 1,789.40.
The Nasdaq Composite Index was up 29.51 points, or 0.74
percent, at 4,030.49.
The S&P 500 fell below its 14-day moving average on
Wednesday and has not risen above it since, a sign of weak
near-term momentum. However, the benchmark index is less than 2
percent below its record closing high, indicating that recent
selling has not been panic-driven.
Twitter Inc fell 0.9 percent to $58.43 after both
Wells Fargo and SunTrust downgraded the social media stock.
Procter & Gamble plans to reorganize its overseas
business as part of Chief Executive A.G. Lafley's plans to cut
costs, according to a Bloomberg report that cited three
unidentified people briefed on the matter.
The New York Federal Reserve said on Monday its "Empire
State" manufacturing activity index rose in December to 0.98
from -2.21 in November. Economists in a Reuters survey had
expected a reading of 4.75.
Overseas, European shares rose 0.9 percent after
Markit's Flash Eurozone Composite Purchasing Managers' Index
ended 2013 at its highest level of the year.