* Canadian Pacific approached CSX about merger -WSJ
* Earnings reports to pick up speed this week
* Dow down 0.01 pct, S&P down 0.1, Nasdaq up 0.1 pct (Updates to early afternoon)
By Caroline Valetkevitch
NEW YORK, Oct 13 (Reuters) - U.S. stocks were nearly flat in early afternoon trading on Monday but were off the lows of the session following the S&P 500's break below 1,900 and another key technical support level.
The index traded as low as 1,890.67 earlier in the session. It remained below its 200-day moving average of around 1,905.
Investors have been cautious ahead of earnings this week, one of the busiest weeks of the reporting period.
"I think investors are looking at this earnings period with a bit of optimistic caution. Wall Street analysts continue to be a bit conservative on their estimates, and when all is said and done, you're going to have beat rates both on earnings and revenue," said Bruce Zaro, chief technical strategist, Bolton Global Asset Management in Boston.
At 1:21 p.m., the Dow Jones industrial average fell 1.32 points, or 0.01 percent, to 16,542.78, the S&P 500 lost 2.28 points, or 0.12 percent, to 1,903.85 and the Nasdaq Composite added 3.55 points, or 0.08 percent, to 4,279.79.
The largest percentage gainer on the S&P 500 was CSX Corp , which rose 9.0 percent, while the largest percentage decliner was QEP Resources, down 5.8 percent.
Canadian Pacific Railway Ltd has approached CSX about merging the two North American railroad operators to create a transcontinental carrier worth more than $60 billion, according to the Wall Street Journal.
The largest percentage gainer on the Nasdaq 100 was VimpelCom, rising 4.4 percent, while the largest percentage decliner was Tesla Motors, down 3.9 percent.
Advancing issues were outnumbering declining ones on the NYSE by 1,665 to 1,318, for a 1.26-to-1 ratio on the upside; on the Nasdaq, 1,568 issues were rising and 1,044 falling for a 1.50-to-1 ratio favoring advancers.
The benchmark S&P 500 index was posting three new 52-week highs and 35 new lows; the Nasdaq Composite was recording 18 new highs and 257 new lows. (Editing by Nick Zieminski)