* Investors look ahead to Fed meeting, elections
* U.S., China factory data lift some sectors
* Dow, S&P flat, Nasdaq down 0.1 pct (Updates to afternoon trading, changes byline)
By Ryan Vlastelica
NEW YORK, Nov 1 (Reuters) - U.S. stocks were little changed on Monday as investors were reluctant to make bets ahead of U.S. elections and a Federal Reserve meeting that is expected to bring further stimulus to the economy.
Despite the cautiousness, industrial and energy shares gained after reports of strength in U.S. and Chinese manufacturing data underscored the view that the recovery continues.
Monday's data was "very strong," David Kupersmith, the head trader at the Greenwich, Connecticut-based Third Wave Global Investors, said. Stock indices gained more than 1 percent in early trading.
But "the focus will be on the elections and the Fed this week, so the impact from this won't be as strong as it would have been otherwise," Kupersmith said.
The Dow Jones industrial average was down 1.14 points, or 0.01 percent, at 11,117.35. The Standard & Poor's 500 Index was up 0.29 points, or 0.02 percent, at 1,183.55. The Nasdaq Composite Index was down 2.48 points, or 0.10 percent, at 2,504.93.
If the election results in the Republican Party taking control of the House, as polls indicate, the Obama administration's ability to enact its agenda would be in jeopardy. Among the main Obama-backed laws recently enacted were overhauling healthcare and financial regulation.
Traders said the energy sector could flourish after Republican election gains as there will be less chance of increased regulation.
The Fed is expected to announce on Wednesday it will relaunch heavy bond buying. Most analysts expect the size and the scope of asset purchases to be about $100 billion a month, starting with a plan to buy $500 billion in bonds between now and early 2011.
Stocks have gained more than 12 percent since the start of September on the hopes of Fed monetary easing and Republican gains in Tuesday's vote as well as from stronger-than-expected earnings.
"If things don't come out as expected, there could be significant downside because there's so little liquidity in the markets," said Mike Holland, who oversees more than $4 billion as chairman of Holland & Co in New York.
"Investors have priced in certain expected benefits from the Fed and elections, and what markets are squaring away now are any possible surprises."
Volume is low as many traders are reluctant to make major bets ahead of those events. The CBOE Volatility index rose to 22.03.
The S&P energy index rose 0.9 percent as reports showed U.S. factory activity in October expanded and construction spending rose unexpectedly in September. Other data showed manufacturing in China expanded at the fastest pace in six months in October.
On the Dow, Caterpillar rose 1.4 percent to $79.65 while Exxon Mobil climbed 1 percent to $67.13. December crude futures surged 2.2 percent to $83.21 per barrel.
Weighing on the Nasdaq was Amazon.com, down 1.6 percent at $162.62. The stock fell 2.3 percent last week but was up 32 percent from the beginning of September through the end of October.
Weakness in the euro against the dollar also helped to limit the advance. The dollar has developed an inverse relationship with stocks.
In the financial sector, M&T Bank Corp rose 4.5 percent to $78.12 after news it would buy Wilmington Trust Corp in a deal worth $351 million. Shares of Wilmington fell 42.5 percent to $4.09.
Baker Hughes Inc rose 5.2 percent to $48.73 after it reported a third-quarter profit that beat expectations..
(Editing by Kenneth Barry)