US STOCKS-Wall St finishes flat; deal news offsets housing data

* Dollar Tree (NasdaqGS: DLTR - news) offers to buy Family Dollar; deal valued at $9.2 bln

* June pending home sales unexpectedly fall

* Dow up 0.1 pct; S&P 500 up 0.03 pct;, Nasdaq off 0.1 pct (Updates to close)

By Caroline Valetkevitch

NEW YORK, July 28 (Reuters) - U.S. stocks ended nearly flat on Monday as the latest deal news offset losses following discouraging data on the housing market and some signs of weakness in the services sector.

Dollar Tree Inc offered to buy rival discount chain Family Dollar Stores Inc (NYSE: FDO - news) for about $8.5 billion. The transaction, including debt, values Family Dollar at about $9.2 billion. Family Dollar's stock shot up 24.9 percent to $75.74 and was the S&P 500's biggest percentage gainer. Dollar Tree's shares gained 1.2 percent to $54.87.

In other deal news, Zillow Inc (NasdaqGS: Z - news) agreed to buy Trulia Inc for $3.5 billion in stock in a deal that would combine the two most popular U.S. real estate website operators Trulia (NYSE: TRLA - news) 's shares jumped 15.4 percent to $65.04. Zillow's stock rose 0.9 percent to $160.32.

Investors' optimism, however, was limited by the day's economic data, among the latest to suggest that the economy's momentum was slowing.

An index of pending home sales unexpectedly fell 1.1 percent in June, the National Association of Realtors said. The report followed an 8.1 percent drop of new home sales in June, the biggest slump in almost a year. The PHLX housing sector index tumbled 1.4 percent. Shares (Frankfurt: DI6.F - news) of D.R. Horton Inc, the No. 1 U.S. homebuilder, slipped 0.6 percent to $21.48.

Investors also are turning their focus to the Fed's meeting on Tuesday and Wednesday, when the U.S. central bank's officials could make some subtle changes to their policy statement about how and when they will eventually raise interest rates.

"What they talk about in their statement, particularly with regard to the trajectory of the economy, is going to be important to the market. So there are probably some investors on the sidelines waiting to see what might come out of that," said Bucky Hellwig, senior vice president at BB&T Wealth Management in Birmingham, Alabama.

The Dow Jones industrial average rose 22.02 points or 0.13 percent, to end at 16,982.59. The S&P 500 inched up just 0.57 of a point or 0.03 percent to finish at 1,978.91. The Nasdaq Composite, though, slipped 4.66 points or 0.10 percent, to close at 4,444.91.

The market may be struggling to cross some key round numbers, with the Dow sitting just below 17,000 and the S&P 500 near 2,000, some analysts said.

Among the day's most active stocks was El Pollo Loco Holdings Inc, a restaurant chain that went public late last week. El Pollo Loco leaped 43.5 percent to close at $34.48, extending the rally from Friday, its first day of trading.

Cummins Inc (NYSE: CMI - news) , the U.S. maker of engines and other vehicle components, raised its full-year revenue outlook, citing improved North American demand, but investors were not impressed. The stock dropped 3.2 percent to end at $145.35.

Monday's economic indicators included preliminary data showing that activity in the U.S. services sector stayed at its highest level in 4-1/2 years in July, though readings for new business and employment growth weakened, according to financial data firm Markit (NasdaqGS: MRKT - news) . (Editing by Jan Paschal)