The stock market closed slightly higher on Monday, supported by a flurry of merger news, but the gains were limited as investors kept a close watch on rising oil prices caused by turmoil in Iraq.
"Iraq is an excuse at this point for investors to sell at these levels. As soon as there is some selling, buyers come in almost immediately, and that is why the market is choppy like today," said Peter Cardillo, chief market economist at Rockwell Global Capital. "It's a further indication that this is not a market that will just plunge on geopolitical issues."
The Dow Jones industrial average rose 5.27 points, or 0.03 percent, to end at 16,781.01, according to preliminary figures. The Standard & Poor's 500-stock index edged up 1.62 points, or 0.08 percent, to 1,937.78. The Nasdaq composite index added 10.45 points, or 0.24 percent, to 4,321.11.
On the merger front, the medical device maker Medtronic agreed on Sunday to buy Covidien of Dublin for $42.9 billion and shift its executive headquarters to Ireland in the latest move by American companies to take advantage of lower tax rates abroad. Medtronic shares slid 1.1 percent. In contrast, Covidien's stock jumped 20.5 percent and ranked as the biggest percentage gainer in the S.&P. 500.
"The M.&A. absolutely keeps on coming," said Ken Polcari, director of the NYSE floor division at O'Neil Securities. "It's ripe for it with rates so low, all this money on the balance sheet and companies looking to grow their businesses."
The Williams Companies surged 18.7 percent, making it the S.&P. 500's second-biggest percentage gainer. The pipeline operator said it agreed to acquire control of Access Midstream Partners for $5.99 billion as the first step toward merging it with its operations. Jefferies & Compnay upgraded Williams to a "buy" rating.
Level 3 Communications said it would buy the Internet services provider TW Telecom for $5.7 billion in a cash-and-stock deal. Level 3 shares fell 4.1 percent, while TW Telecom shot up 7.3 percent to $39.29.
Fusion-io soared 22.4 percent after the company agreed to be acquired by SanDisk for about $1.1 billion. SanDisk rose 3.6 percent.
Crude oil futures rose in choppy trading as advances by Sunni insurgents in Iraq fueled concerns over a potential disruption to oil exports from the second-largest OPEC producer.
Brent crude for August delivery gained 48 cents at $112.94 a barrel.
Economic data was positive. Manufacturing output rose in May and factory activity in New York State accelerated sharply this month, buoying hopes of a strong rebound in economic growth this quarter.
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