S&P, Nasdaq higher, Dow dragged down by Nike

By Tanya Agrawal

REUTERS - The S&P 500 and the Nasdaq rose on Monday as a string of M&A deals lifted investor sentiment while the Dow Jones Industrial average was little changed, weighed down by a downgrade of Nike.

The raft of deals helped offset some jitters caused by the FBI's review of newly discovered emails related to Hillary Clinton's private server.

Dow component General Electric was up 0.56 percent at $29.38 after it said it would merge its oil and gas business with oilfield services provider Baker Hughes. Baker Hughes was up 2.7 percent at $60.77.

Level 3 Communications rose 5.1 percent to $56.79 after CenturyLink said it would buy the company in a deal valued at about $34 billion. CenturyLink fell 8.5 percent to $27.82.

Nike was down 3.3 percent at $50.28, after BofA Merrill Lynch cut its rating to "underperform" from "neutral".

U.S. stocks fell in a volatile session on Friday after the Clinton news hit, just days ahead of the election. While Clinton had opened a recent lead over her unpredictable Republican rival Donald Trump in national polls, it had been narrowing even before the email controversy resurfaced.

An ABC News/Washington Post poll released on Sunday showed Clinton with a statistically insignificant 1-point national lead.

"This situation (Clinton email review) is going to keep the market in a very cautious trading atmosphere in this final election week," said Peter Cardillo, chief market economist at First Standard Financial in New York.

At 9:37 a.m. ET (1337 GMT) the Dow Jones industrial average was up 17.94 points, or 0.1 percent, at 18,179.13, the S&P 500 was up 3.91 points, or 0.18 percent, at 2,130.32 and the Nasdaq Composite was up 11.70 points, or 0.23 percent, at 5,201.81.

Seven of the 11 major S&P sectors were higher, with the financial index's 0.46 percent rise leading the advancers.

The market is also watching the outcome of the U.S. Federal Reserve meeting, which begins on Tuesday. The Fed is unlikely to make a move this week, as it is too close to the election, with many market participants instead expecting a hike in December.

With uncertainty surrounding the outcome of the election and the Fed raising rates by the year-end, the U.S. market is headed for its worst monthly decline since January.

Data on Monday showed U.S. consumer spending rose more than expected in September. The Commerce Department said consumer spending, which accounts for about 70 percent of U.S. economic activity, increased 0.5 percent after a downwardly revised 0.1 percent drop in August.

TeamHealth Holdings jumped 15.6 percent to $42.50 after Blackstone said it would buy the company in a $6.1 billion deal.

Advancing issues outnumbered decliners on the NYSE by 1,651 to 933. On the Nasdaq, 1,193 issues rose and 1,019 fell.

The S&P 500 index showed four new 52-week highs and two new lows, while the Nasdaq recorded 11 new highs and 37 new lows.

(Reporting by Tanya Agrawal; Editing by Sriraj Kalluvila)