Stocks down in early trading

Stocks fell Monday morning despite strong merger activity, as investors awaited a Federal Reserve policy decision this week and reports that will provide more clues to the strength of the world's largest economy.

In the first half-hour of trading, the Dow Jones industrial average was down 57.4 points, about 0.3 percent, at 16,903.2. The Standard & Poor's 500 index was off 6.3 points, about 0.3 percent, at 1,972.1, and the Nasdaq composite had lost 15.5 points, about 0.4 percent, to 4,434.1.

Trulia Inc. jumped 12 percent as Zillow Inc. agreed to purchase the company for $3.5 billion. Family Dollar Stores Inc., a discount store chain, soared 23 percent after Dollar Tree Inc. agreed to buy it.

"There is a lot of economic data and a lot of earnings coming out this week," Jonathan Corpina, senior managing partner at Meridian Equity Partners who works on the floor of the New York Stock Exchange, said by phone. "The bigger headline here is the M&A activity we continue to see, which is a positive for the market."

Mergers and acquisitions are booming amid low interest rates and growing corporate cash hoarding. More than $1.1 trillion worth of takeovers have been announced this year, exceeding the total of 2013, data compiled by Bloomberg show.

The Federal Reserve is to announce announces its next policy decision at the conclusion of a two-day meeting of the Open Market Committee on July 30. Investors will get a reading on second-quarter growth that same day, while the government's labor report on Aug. 1 may show employers added 231,000 jobs this month.

The Fed is expected to continue scaling back its monthly asset purchases to $25 billion from $35 billion on July 30, according to economists surveyed by Bloomberg, keeping it on pace to end the program late this year. The policy-making committee last month repeated it's likely to "reduce the pace of asset purchases in further measured steps" and that it expects interest rates to stay low for a "considerable time" after the bond-buying ends.