U.S. stock futures flat as investors turn eyes to Fed meeting

By Ryan Vlastelica

NEW YORK (Reuters) - U.S. stock index futures were little changed on Monday, suggesting investors were reluctant to buy even after a steep decline last week, as they turned their focus to 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 bond-buying stimulus, with many market participants expecting the Fed to announce a tapering in March.

* Stronger economic data of late, however, has led some to believe the tapering will come earlier, 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.

A read on New York manufacturing is among the data on tap for Monday, with the report scheduled for release at 8:30 a.m. EST (1330 GMT). Manufacturing is seen rebounding in December. November industrial output and capacity utilization data are also on tap.

Overseas, European shares rose 0.7 percent after Markit's Flash Eurozone Composite Purchasing Managers' Index ended 2013 at its highest level of the year.

S&P 500 futures were flat but remained above fair value, a formula that evaluates pricing by taking into account interest rates, dividends and time to expiration on the contract. Dow Jones industrial average futures added 38 points and Nasdaq 100 futures were flat.

The S&P 500 fell below its 14-day moving average on Wednesday and has not closed above it since, a sign of weak near-term momentum. However, the benchmark index is less than 2 percent above its record closing high, indicating that recent selling has not been panic-driven.

In company news, a source close to the matter told Reuters that Charter Communications Inc was preparing to send an offer letter to acquire Time Warner Cable Inc for less than $135 a share. Time Warner closed Friday at $131.40.

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.

Wall Street closed flat on Friday, but all three major indexes fell more than 1.5 percent last week, the largest weekly percentage drop since August.

(Editing by Bernadette Baum)