US stocks edged higher on Monday as oil prices eased, the dollar recovered some ground and merger and acquisition activity helped the tobacco and technology sectors. Philip Morris, the tobacco arm of Altria Group Inc, is bidding $5 billion to buy Indonesian tobacco firm PT Hanjaya Mandala Sampoerna Tbk. Altria was up about 1 percent at $65.80.
International Business Machines Corp was up about 0.4 percent to $91.90 after it said it would buy Ascential Software Corp for about $1.1 billion. Ascential was up 16.6 percent at $18.32.
However, heavy equipment maker Caterpillar Inc weighed on the Dow as it fell about 2 percent to $96.90 after Legg Mason analyst Barry Bannister lowered his rating on the company to "hold" from "buy," saying the stock is fairly valued in the short-term near $100.
The Dow Jones industrial average was up 22.24 points, or 0.21 percent, at 10,796.60. The Standard & Poor's 500 Index was up 3.52 points, or 0.29 percent, at 1,203.60. The technology-laced Nasdaq Composite Index was up 3.02 points, or 0.15 percent, at 2,044.62.
"There is a lack of big news out there, so the market is trading on some other issues - oil pulled back a bit, giving a little boost, " said Peter Boockvar, equity strategist at Miller Tabak & Co.
"There is a lot of (economic) data tomorrow through the rest of the week, so the market is sitting on its hands waiting to see what that data looks like."
Retail sales data for February is due on Tuesday and a report on the fourth-quarter US current account deficit and February's industrial production data are scheduled for Wednesday.
Oil prices eased on Monday as Saudi Arabia called for Opec exporters to raise output by half a million barrels per day to stem soaring global energy costs.
US light crude was down 53 cents to $53.90 a barrel. The price last week peaked at $55.65, just two cents below October's all-time record of $55.67.
Lower oil prices help calm concerns of high energy costs, which can curb consumer spending and dampen corporate profits.
Genzyme Corp rose 2.2 percent to $56.85 as Piper Jaffray raised its earnings per share estimates on the biotech company, based partly on its "increased comfort" with sales trends for Renagel, a kidney disease drug.
Research In Motion Ltd was up about 3 percent at $62.43 after Yahoo Inc said it struck a deal with RIM to provide its instant messenger service to users of RIM's popular BlackBerry wireless e-mail device. Walt Disney Co was up 1.3 percent at $27.97 after it named current company president Robert Iger to succeed chief executive Michael Eisner.
American International Group Inc fell about 1.6 percent to $63.66 after news reports that AIG's Chief Executive Maurice Greenberg is planning to step down amid board concern over a rising number of regulatory inquiries into the insurance giant.
AutoZone Inc, the largest US auto parts retailer, was down 10 percent at $88.44.
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