NEW YORK (CNNMoney.com) - Stocks ended mixed Monday and didn't stray too far from breakeven as concern over Iran's nuclear program and a too-eager Fed overshadowed some merger news.

The Dow Jones industrial average (up 4.65 to 10,798.27, Charts) and the broader Standard & Poor's 500 index (up 0.99 to 1,265.02, Charts) barely edged higher. The Nasdaq composite (down 3.78 to 2,258.80, Charts) dipped.

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Disney (Research) reported higher quarterly profit that beat estimates after the bell Monday, and its shares rose around 2 percent after-hours.

General Motors shares also rose after the bell after the company's board of directors elected Jerome York to the board.

An adviser to Kirk Kerkorian, who is GM's largest individual shareholder, York has urged the world's largest automaker to cut its $2 annual dividend by half. As of late Mondy afternoon, the GM had not commented on its dividend.

Traders will look to earnings from Coca-Cola before the bell and Cisco after the bell to move the markets Tuesday.

During normal trade Monday, investors shunned the merger news and continued to fear that Friday's employment report, which came in lower than expected, will prompt more interest rate hikes from the Federal Reserve, according to Hugh Johnson, chairman of the asset management company Johnson Illington Advisors.

"The Federal Reserve might be seduced by worries of inflation and raise interest rates too high," said Johnson. "That is a very big risk in 2006."

Stock investors dislike high interest rates because it raises the cost of borrowing money and might hinder business expansion.

Johnson also said oil prices will be on investors' minds this week as tensions mount over Iran's nuclear program.

Oil prices, although closing lower on rising U.S. gasonline stocks, were higher for most of the day after Iran resumed uranium enrichment and ended United Nations checks of its nuclear sites in response to action against it by the International Atomic Energy Agency Saturday.

The March light crude futures contract fell 26 cents to settle at $65.11 a barrel on the New York Mercantile Exchange.

Among Dow issues, Alcoa (up $1.45 to $32.03, Research) jumped over 4 percent after J.P. Morgan upgraded the aluminum maker from neutral to overweight.

And Reuters reported that Wachovia (Research), the nation's No. 4 bank, has teamed up with investment firm Kohlberg Kravis Roberts & Co. to bid for part of GMAC, the finance unit that troubled automaker General Motors is looking to sell a controlling stake in.

A possible bid for GMAC may be weighed by GM's board, which is meeting today. The board may also vote to cut its dividend. GM (up $0.19 to $23.34, Research) shares rose about 1 percent during regular trade in anticipation of an announcement, which could come anytime.

On the merger and acquisitions front, U.S. Steel (up $3.65 to $61.57, Research) jumped over 7 percent after reports that it might be a takeover target by the German firm Arcelor, according to Briefing.com.

Women's apparel retailer J. Jill is being bought by fellow retailer Talbots (down $0.93 to $26.34, Research) for $517 million, roughly 25 a percent premium on the share price. That news sent J. Jill's (up $4.37 to $23.57, Research) shares soaring nearly 23 percent.

Citadel Broadcasting (Research) was putting the finishing touches over the weekend on a $2.7 billion agreement to acquire most of the radio assets of Walt Disney (Research), according to a published report.

Among stocks pulling down the Nasdaq, IBM (down $0.46 to $79.51, Research) and Apple (down $4.55 to $67.30, Research) both fell after their stock prices broke through multi-week support levels, with Apple down over 5 percent.

Other stocks moving include CNNMoney.com's parent Time Warner (up $0.17 to $18.57, Research), which rose over 1 percent after the company said it will sell its book publishing unit to French media company Lagardere for $537.5 million.

And insurer UnumProvident (up $0.26 to $21.13, Research) gained over 1 percent after Citigroup raised its stock price target to $28 from $25.

Market breadth was positive. On the New York Stock Exchange, winners beat losers three to two on volume of 1.5 billion shares. On the Nasdaq, advancers edged out decliners on volume of 1.8 billion shares.

Subodh Kumar, chief U.S. investment strategist at CIBC World Markets, said traders weren't giving stocks the usual boost they get from merger activity because they are focused on more short-term things such as an aggressive Fed and recent earnings reports that were disappointing.

He also said Monday's movement of short-term Treasury yields above long yields was not a major concern for investors. The yield on the two-year note rose above that on 30-year bonds for the first time since December 2000, Reuters reported. That kind of move in bond yields, known as a yield curve inversion, can be a signal of slower economic growth -- or recession -- ahead.

But most investors aren't that concerned about the yield move -- at least not yet.

"If you focus on the yield curve inversion and think the Fed has a lot more to go with rates, then you'd think the market has peaked," said Kumar. "But I don't think that's the case."

Treasury prices fell, lifting the yield on the benchmark 10-year note to 4.54 percent, from 4.52 percent reached late Friday.

In currency trading, the dollar rose against the euro and yen.

Major markets in Asia closed mostly higher Monday, with Japan's Nikkei reaching a 5-1/2-year high. European markets also finished higher.

COMEX gold for April delivery rose $2.70 to settle at $574.30 an ounce.