* Indexes: Dow up 0.39 pct, S&P off 0.01 pct, Nasdaq up 0.04 pct
* Gilead falls as Express Scripts picks AbbVie treatment
* Housing shares drop in wake of home sales data (Updates to late morning)
By Chuck Mikolajczak
NEW YORK, Dec 22 (Reuters) - U.S. stocks were little changed on Monday, after the benchmark S&P 500 enjoyed its best week in nearly two months, as a sharp drop in shares of Gilead Sciences offset broader gains in key indexes.
Gilead slumped more than 12 percent to $94.80 as the biggest drag on both the S&P and Nasdaq 100 indexes. Express Scripts, the nation’s largest pharmacy benefit manager, said it would no longer cover Gilead’s treatments after it lined up a cheaper price from AbbVie Inc for its newly approved hepatitis C treatment.
Market participants said investors used the Gilead news to lock in recent gains, though it wasn’t reflective of the fundamentals of the broader market.
“That is very specific to Gilead, so that one is getting crushed, but it shouldn’t necessarily set a completely negative tone over the rest of the market, there is no reason for it,” said Ken Polcari, director of the NYSE floor division at O‘Neil Securities in New York.
“The market has had a decent move the last couple of days, so anything could cause people to take a little money off the table.”
The benchmark S&P index rose 3.4 percent last week, boosted by a 5 percent jump over three sessions, after the U.S. Federal Reserve said it would take a “patient” approach toward raising interest rates and oil prices appeared to stabilize.
Brent crude hit a high of $62.97 and WTI crude rose to as much as $58.53 but reversed gains and turned lower after Saudi Arabia indicated it could increase its output. Brent was last down 54 cents at $60.84 while U.S. crude was last off 1.6 percent at $56.24. The S&P Energy index lost 1.6 percent after rallying nearly 10 percent last week.
The Dow Jones industrial average rose 69.35 points, or 0.39 percent, to 17,874.15, the S&P 500 lost 0.31 points, or 0.01 percent, to 2,070.34 and the Nasdaq Composite added 1.68 points, or 0.04 percent, to 4,767.06.
Housing shares were lower after existing home sales slumped 6.1 percent to an annual rate of 4.93 million units, the lowest level since May. The PHLX housing sector index lost 0.3 percent.
Trading volume is expected to be light this week due to the Christmas holiday, which could increase volatility. U.S. equity markets will open for an abbreviated session Wednesday and be closed on Thursday.
Achillion Pharmaceuticals Inc said it would test a combination of two of its experimental hepatitis C drugs which showed promise in separate studies. Its shares surged 11.5 percent to $15.85.
Caesars Entertainment Corp said it would merge with affiliate Caesars Acquisition in an all-stock deal. Caesars Entertainment jumped 17.6 percent to $15.87 while Caesars Acquisition rose 7.3 percent to $10.15.
Advancing issues outnumbered declining ones on the NYSE by 1,489 to 1,448, for a 1.03-to-1 ratio; on the Nasdaq, 1,435 issues rose and 1,171 fell for a 1.23-to-1 ratio favoring advancers.
The benchmark S&P 500 index was posting 55 new 52-week highs and 5 new lows; the Nasdaq Composite was recording 101 new highs and 20 new lows.
Editing by Bernadette Baum