US STOCKS-Wall Street flat as growth concerns breed caution

Reuters - UK Focus

* AstraZeneca (NYSE: AZN - news) rejects sweetened Pfizer (NYSE: PFE - news) offer

* AT&T (NYSE: T - news) to buy DirecTV (Frankfurt: DIG1.F - news) for $48.5 billion

* Indexes: Dow off 0.05 pct, S&P up 0.11 pct, Nasdaq up 0.46pct (Updates to market open, adds quote)

By Chuck Mikolajczak

NEW YORK (Frankfurt: HX6.F - news) , May 19 (Reuters) - U.S. stocks were little changedon Monday, on the heels of back-to-back weekly declines for theS&P 500, as investors exercised caution over valuations after arun of mixed economic data.

U.S.-listed shares of AstraZeneca slumped 9.6percent to $72.60. The British drugmaker rejected a sweetenedand "final" merger offer from Pfizer which would havecreated the world's largest pharmaceuticals group. Pfizer sharesadvanced 1.5 percent to $29.56.

AT&T lost 1.7 percent to $36.12 after the telecomcompany said it will acquire DirecTV for $48.5 billion,as it seeks fresh avenues of growth beyond the maturing U.S.cellular business. DirecTV shares lost $1.81 at $84.37.

Equities have come under pressure, with consecutive weeklydeclines for the first time since January, as investors havebecome leery about growth prospects. Last week, readings onretail sales and consumer sentiment fell shy of expectationswhile labor and housing data provided reason for optimism.

"The issues really are more the U.S. economy and the factequity investors are very hopeful we will see an acceleration inthe economy," said Tim Ghriskey, chief investment officer ofSolaris Group in Bedford Hills, New York.

"We still get very mixed economic signals - one positivedata point is in contrast with a negative data point."

Small-cap stocks, often the first beneficiaries of growth,have tumbled. The small-cap Russell 2000 index hasseveral times approached correction territory, a decline of 10percent from a recent high, only to bounce back slightly.

Investors' defensive posture has been reflected by a sectorrotation into utilities, telecoms and energy, which haveoutperformed the broader S&P 500 over the past three months.

The Dow Jones industrial average fell 7.7 points or0.05 percent, to 16,483.61, the S&P 500 gained 2.14points or 0.11 percent, to 1,880 and the Nasdaq Composite added 18.74 points or 0.46 percent, to 4,109.33.

Campbell Soup Co fell 3.4 percent to $43.58, theworst performer on the S&P 500. The world's largest soup makerposted weaker-than-expected quarterly sales and cut itsfull-year sales guidance.

Earnings season will effectively draw to a close this week,with 23 companies scheduled to report, including retailers HomeDepot and Lowe's Cos.

Of 464 S&P 500 companies that reported through Friday, 69.2percent beat expectations, above the long-term average of 63percent and the 66 percent average over the past four quarters. (Editing by Bernadette Baum and Nick Zieminski)

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