NEW YORK (CNNMoney.com) -- Stocks kicked off the week with gains Monday as a string of big mergers kept investors from brooding about what the Federal Reserve will do with interest rates.

The Dow Jones Industrial average (up 56.19 to 11,045.28, Charts) and the broader Standard & Poor's 500 (up 6.06 to 1,250.56, Charts) index both rose about 0.5 percent.

The Nasdaq composite (up 12.20 to 2,133.67, Charts) climbed about 0.6 percent, led by gains the software and Internet sectors.

Major deals in the mining, steel and consumer healthcare sectors were all announced Monday, giving stocks a much-needed boost after a rough week.

Investors also took in a report showing a slight pickup in new home sales; a small decline was expected. New home sales for May rose to an annual rate of 1.23 million units from a revised 1.18 million pace in April. (Full story)

The deals and stronger-than-expected housing report gave stocks a lift, but investors are still holding out to see what direction the Fed is going to take when it meets Wednesday and Thursday, market analysts said.

"I'd be surprised if [investors] took any big bets before we get a little more clarity from the Fed," said Michael Pento, senior market strategist at Delta Global Advisors, Inc.

Fed policy-makers are all but certain to raise interest rates another quarter-percentage point at their two-day meeting, but investors will be focusing on the central bank's statement for clues to how much further rates may rise. (Full story)

Tuesday brings another reading on the housing sector. May existing home sales are due, as is a look at June consumer confidence.

As of 5:30 p.m. ET, Nasdaq and S&P futures pointed to a flat to positive opening for stocks Tuesday.

In merger news, Phelps Dodge said it would buy two major Canadian nickel miners, Inco and Falconbridge, in a $40 billion transaction that would create the largest mining company in North America.

The merger is the largest announced mining deal on record, according to deal tracker Dealogic.

Shares of Phelps Dodge (down $6.72 to $76.23, Charts) tumbled 8 percent, while Inco (up $5.95 to $64.21, Charts) surged 10 percent and Falconbridge (up $2.50 to $51.80, Charts) jumped 5 percent.

Shares of Johnson & Johnson (down $1.11 to $60.21, Charts) fell about 1.8 percent after the company announced a $16.6 billion deal to buy the consumer products unit of fellow Dow component Pfizer. The unit includes such well-known brands as Listerine, Rolaids, Rogaine and Sudafed. Pfizer (up $0.37 to $23.01, Charts) shares rose nearly 2 percent.

Meanwhile, Arcelor bowed to a sweetened $32.2 billion takeover bid from Mittal Steel (Charts). The merger will create a world steel giant three times larger than its nearest rival.

Among stocks in the Dow industrials, 24 rose and six fell.

Chipmaker Intel (up $0.28 to $18.28, Charts) was an advancer on the Dow. The company's shares rose 1.6 percent after it said Monday it plans to start shipping new processors for servers this week.

Elsewhere, shares of Warren Buffett's Berkshire Hathaway (down $600.00 to $91,500.00, Charts) edged lower after the billionaire said he would give most of his $44 billion fortune to the Bill & Melinda Gates Foundation and other charities. (Full story)

Wireless chipmaker Qualcomm (up $0.59 to $40.09, Charts) gained 1.5 percent after brokerage Thomas Weisel upgraded the company to "outperform" from "peer perform".

Homebuilder shares rose on the stronger-than-expected reading of May new home sales. The Dow Jones U.S. Home Construction Index added about 2 percent. No. 3 builder Lennar (up $1.14 to $45.68, Charts) rose nearly 3 percent after it said its quarterly profit rose.

Market breadth was positive. On the New York Stock Exchange, advancers topped decliners by a margin of five to three on volume of 1.34 billion shares. On the Nasdaq, winners beat losers by a margin of three to two as 1.41 billion shares changed hands.

In commodity markets, U.S. light crude oil for August delivery added 93 cents to settle at $71.80 a barrel on the New York Mercantile Exchange.

COMEX gold for August delivery fell $1 to $587 an ounce.

Treasury prices edged lower, raising the yield on the benchmark 10-year note to 5.23 percent from 5.22 percent late Friday. Bond prices and yields move in opposite directions.

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

Related: Mergers to keep on coming

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