According to the documentation for the plugin, there is an open
event that fires when the menu opens. You can put some code in that event to hide the drop down:
$( "#search" ).autocomplete({
source: "/app/friends",
minLength: 2,
response: function( event, ui ) {
display(ui.content);
},
open: function( event, ui ) {
$(".ui-autocomplete").hide();
}
});