* Fed Chair Yellen to speak at Jackson Hole on Friday
* Medivation jumps on $14 bln Pfizer deal
* Indexes: Dow off 0.08 pct, S&P off 0.05 pct, Nasdaq up 0.05 pct (Updates to afternoon trading, changes byline)
By Chuck Mikolajczak
Aug 22 (Reuters) - U.S. stocks were little changed on Monday as a drop in oil prices that weighed on the energy sector was offset by strong gains among biotech stocks.
Oil prices fell about 3 percent, after touching two-month highs last week, on worries about burgeoning Chinese fuel exports, more Iraqi and Nigerian crude shipments and a rising U.S. oil rig count.
The S&P energy index lost 0.9 percent and was the worst-performing of the 10 major S&P groups. It was on track for its worst performance in two weeks.
“Oil has gone back to kind of calling the shots for the market the last bit, until we get closer to the Fed meeting in September that is probably going to be the case,” said Peter Jankovskis, co-chief investment officer at OakBrook Investments LLC in Lisle, Illinois.
Biotech stocks received a boost from Pfizer’s $14 billion acquisition of cancer drug maker Medivation. Medivation’s shares jumped nearly 20 percent as the biggest boost to the Nasdaq, and the Nasdaq biotech index was up 1.7 percent.
As earnings season draws to a close, investor focus will shift to Federal Reserve Chair Janet Yellen’s speech on Friday at the annual central bankers’ meeting in Jackson Hole, Wyoming, to assess the odds of an interest rate hike in the coming months.
“It just brings a rate hike to the forefront as people are starting to think about it again,” said Jankovskis.
The case for a rate hike was bolstered by Fed Vice Chairman Stanley Fischer’s comments that the U.S. economy was close to hitting the Fed’s job and inflation targets.
Traders have priced in an 18 percent chance of a rate hike for September, up from the 12 percent on Friday. That measure rose to more than 53 percent for December from 46.2 percent, according to the CME Group’s FedWatch tool.
According to Thomson Reuters data through Monday morning, of the 479 companies in the S&P 500 that have reported earnings, 71 percent have topped Wall Street’s expectations. Earnings are currently showing a decline of 2.3 percent for the quarter.
The Dow Jones industrial average fell 30.54 points, or 0.16 percent, to 18,522.03, the S&P 500 lost 3.04 points, or 0.14 percent, to 2,180.83 and the Nasdaq Composite dropped 2.17 points, or 0.04 percent, to 5,236.21.
Apple was off 0.9 percent and was the biggest drag on all three major indexes.
Chipmaker Intersil jumped 19.9 percent $18.76 after a source told Reuters that Japan’s Renesas was in the final stages of negotiations to acquire the company for about $2.99 billion.
Declining issues outnumbered advancing ones on the NYSE by a 1.12-to-1 ratio; on Nasdaq, a 1.00-to-1 ratio favored decliners.
The S&P 500 posted 11 new 52-week highs and no new lows; the Nasdaq Composite recorded 93 new highs and 19 new lows. (Reporting by Chuck Mikolajczak; Editing by Dan Grebler)