Stocks are edging higher after a bailout of the troubled emirate of Dubai helps allay concerns over global credit problems.
At midday, the Dow Jones industrial average is up 32 at 10,504. The Standard & Poor's 500 index is up 7 at 1,113, while the Nasdaq composite index is up 15 at 2,206.
Investors were encouraged by the latest evidence of a rebound in big corporate dealmaking. Exxon Mobil Corp.'s $31 billion purchase of XTO Energy sent energy stocks sharply higher. The deal will help Exxon tap into the growing supply of natural gas in the U.S. and could signal more
consolidation in the energy industry.
Stocks were already rising early Monday on news that Abu Dhabi had extended $10 billion to Dubai to help the debt-strapped Middle Eastern city-state stay afloat. Markets had been worried in recent weeks that debt problems in the struggling boomtown could send ripples through global credit markets.
In other positive news, banking giant
Citigroup Inc. said it would pay back $20 billion in bailout money it received as part of the government's financial rescue program. The government will also sell its 34 percent stake in the company. The news came just days after
Bank of America Corp. repaid the entire $45 billion in bailout money it owed U.S. taxpayers.
Despite the gain in stocks, investors were being cautious, refraining from making big bets in any one area of the market. Bond prices were little changed and commodities were just slightly higher.
In recent weeks, a nine-month rally in stocks has slowed as investors lock in gains and try to determine how best to position themselves in the new year. The Standard & Poor's 500 index is up just 1 percent so far this month, after a 5.7 percent gain in November and a 63.5 percent gain since early March.
The Dow Jones industrial average rose 15.27, or 0.2 percent, to 10,486.77. The Standard & Poor's 500 index rose 4.73, or 0.4 percent, to 1,111.14, while the Nasdaq composite index rose 10.79, or 0.5 percent, to 2,201.10.
Bond prices were little changed. The yield on the benchmark 10-year Treasury note held steady at 3.55 percent.
The dollar fell against other currencies, helping to lift commodities prices. Commodities, which are priced in dollars, become cheaper for foreign buyers when the greenback falls.
Gold added $3 to $1,123 an ounce, while oil prices edged up 38 cents to $72.33 a barrel on the New York Mercantile Exchange.
Analysts said stocks are likely to drift over the next few days as investors await more details from the Federal Reserve, which wraps up its last policy meeting of the year on Wednesday.
"The market is just simply buying time," said Ryan Detrick, senior technical strategist at Schaeffer's Investment Research. "People are waiting for more of a clue of what the Fed's thinking."
Investors expect the central bank to keep its benchmark interest rate at a historic low level of near zero for the time being. But there is some concern that rates could rise sooner than previously thought as the economy improves.
While an end to low interest rates would be a sign the economy is on solid footing, it could also trip up stocks that have flourished this year in an environment of easy money.
In other trading, the Russell 2000 index of smaller companies rose 2.14, or 0.4 percent, to 602.51.
XTO shares shot up nearly 15 percent following the acquisition news. Shares rose $6.20 to $47.69. Exxon shares fell $3.24, or 4.5 percent, to $69.59.
Citigroup shares slipped 18 cents, or 4.6 percent, to $3.77.
About two stocks rose for every one that fell on the
New York Stock Exchange, where volume came to 319 million shares compared with 270.2 million at the same time on Friday.
Overseas, Japan's Nikkei stock average fell 0.2 percent. In afternoon trading, Britain's FTSE 100 rose 0.9 percent, Germany's DAX index was up 0.6 percent, and France's CAC-40 gained 0.4 percent.
