Stock Market Today: Smart Money Eases Out of U.S. Stocks

NEW YORK (TheStreet) -- Money from large investors has slowed its flow into U.S. equities in the lead-up to the Federal Reserve's policy meeting announcement this Wednesday, contributing to the dull finish of the U.S. stock markets on Monday.

The Dow Jones Industrial Average was up just 0.26% to 17,031.14. The S&P 500 ticked down 0.07% to 1,984.13. The Nasdaq fell 1.07% to 4,518.90.

Watch the video below for a closer look at how U.S. markets ended the trading day Monday:


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Recent active investment manager surveys are showing a slight reduction in exposure to U.S. equities in recent weeks, according to Schaeffer's Investment Research's senior equity analyst Joe Bell.

The stake reductions began a couple of weeks ago as the SPX's rally up to 2,000 acted as a logical area of selling pressure, according to Bell. With the very strong rally during the month of August, it made sense for the market to take a bit of a breather. Furthermore, September is typically the weakest month of the year. Feeding the downward pressure also has been a cut in the Organization for Economic Co-operation and Development economic growth outlooks for the U.S. and European Union on Monday.

"With the FOMC decision coming up, many investors continue to slow down their purchases of U.S. equities," said Bell.

"The consensus of the indicators suggests that the market is likely to be moderately bearish in the first half of the week, with a breakout (up or down) starting on Wednesday afternoon," noted Randy Frederick, managing director of trading and derivatives at the Schwab Center for Financial Research.

In company headlines, Microsoft (MSFT) was off 0.97% to $46.24 after announcing that it's reached a deal to buy "Minecraft" maker Mojang for $2.5 billion.

Tesla (TSLA) plunged 9.08% to $253.86 after Morgan Stanley analyst Adam Jonas wrote a cautionary note about the stock, reflecting CEO Elon Musk's warning about the lofty state of the electric vehicle maker's share prices.

Cognizant (CTSH) said it's signed an agreement to buy health care IT provider TriZetto for $2.7 billion in cash. Cognizant said the acquisition will lead to more than $3 billion in combined health care revenue, serving nearly 245,000 health care providers. Cognizant fell 1.01% to $44.31.

RadioShack (RSH) surged 16.48% to $1.06. After only seven months on the job, John Feray resigned as chief financial officer at the struggling retailer on Sept. 12, citing personal reasons. Holly Etlin, a managing director of AlixPartners and longtime RadioShack adviser, is stepping in as interim finance chief to take his place.

Alibaba is likely to raise the price range of its U.S. initial public offering because of buoyant demand for the deal, people familiar with the situation told The Wall Street Journal. Yahoo! (YHOO) , which has a 22% stake in the Chinese ecommerce giant and plans to sell 121.7 million shares in the upcoming IPO, was down 0.77% to $42.55.

The United States Oil Fund (USO) was up 0.52% to $34.56. The SPDR Gold Trust (GLD) was up 0.22% to $118.64.

-- By Andrea Tse in New York

Follow @AndreaTTse

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