* Fed meeting, more earnings reports awaited
* Pep Boys up after agreeing to be bought by Bridgestone
* Ctrip.com up after deal with Qunar
* Futures down: Dow 5 pts, S&P 1.5 pts, Nasdaq 4.5 pts (Adds details, comment, updates prices)
By Abhiram Nandakumar
Oct 26 (Reuters) - U.S. stocks were set to open little changed on Monday as investors paused ahead of a Federal Reserve policy meeting and key earnings reports later this week.
The Fed will issue a statement on Wednesday, after a two-day meeting, which will scrutinized by investors for a bearing on when the central bank could raise interest rates.
While Fed Chair Janet Yellen has said the central bank could raise rates this year, it will do so only if there are clear signs of sustained economic growth.
Traders are pricing in only a 6 percent chance of rates being increased at this week’s meeting and a 39 percent chance of a December hike, according to CME Group’s FedWatch program.
“I don’t think it’s anything more than an early morning breather after a nice surge in equities,” said Andre Bakhos, managing director at Janlyn Capital in Bernardsville, New Jersey.
Investors are awaiting U.S. home sales data, which is expected to show a decline to an annual rate of 550,000 units in September after two months of gains. The data is expected at 10:00 a.m. ET (1400 GMT).
Wall Street closed higher on Friday after a rally in tech stocks helped the S&P 500 to positive territory for the year.
The three major indexes touched their highest levels since early August, when China’s devaluation of its currency sent global markets into a tailspin.
At 8:36 a.m. ET (1236 GMT), S&P 500 e-minis were down 1.5 points, or 0.07 percent, with 117,058 contracts traded. Nasdaq 100 e-minis were down 4.5 points, or 0.1 percent, on volume of 20,547 contracts. Dow e-minis were down 5 points, or 0.03 percent, with 17,400 contracts changing hands.
“For the rest of today, I would expect a quiet type of session, digesting the recent gains,” Bakhos said.
Strong quarterly results from tech companies have helped improve expectations on overall U.S. third-quarter earnings.
S&P 500 earnings are estimated to have declined a more modest 2.8 percent in the quarter, compared with 4.9 percent forecast at the start of the reporting season, according to Thomson Reuters data.
Valeant Pharmaceuticals fell 5.2 percent to $110.07 in premarket trading. The company said it would set up a panel to probe allegations about its associations with specialty pharmacy distributor Philador.
Ctrip.com rose 17 percent to $86.90 after the online travel firm said it would merge with Qunar Cayman Islands. Qunar jumped 26.9 percent to $50.15.
Pep Boys 22.2 percent to $14.87 after it agreed to be acquired by Bridgestone for $15 per share. (Reporting by Abhiram Nandakumar in Bengaluru; Editing by Saumyadeb Chakrabarty)