NEW YORK (CNNMoney.com) -- Stocks rebounded Monday despite higher oil prices and news that North Korea defied the West and tested a nuclear weapon, on speculation that Google might buy YouTube.

The Dow Jones Industrial average (up 7.28 to 11,857.49, Charts)edged a few points higher but ended just shy of the record close of 11,866.69 set last Thursday, according to early tallies.

The 30-share Dow, the world's most widely watched stock market gauge, climbed as high as 11,872.94 during the session, eclipsing the record trading high of 11,870.06, also set last Thursday.

Of the 30 blue chips in the Dow, 15 rose and 15 fell.

The broader S&P 500 (up 1.08 to 1,350.66, Charts) index rose nearly 0.1 percent while the tech-fueled Nasdaq composite (up 11.78 to 2,311.77, Charts) climbed 0.5 percent.

All three major gauges were lower earlier in the session after reports that North Korea claimed it conducted a successful underground nuclear test Monday, according to the country's official Korean Central News Agency. (Full story.)

Also contributing to early losses, light sweet crude oil for November delivery jumped over a dollar a barrel before settling up 20 cents at $59.96 on the New York Mercantile Exchange.

Stocks rebounded by the afternoon as investors turned their attention to several key corporate deals in the works. Trading volume, however, remained very light due to the Columbus Day holiday.

"It's a quiet day in the market so I wouldn't necessarily read a lot into (today's) action," cautioned Michelle Clayman, chief investment officer at New Amsterdam Partners.

Here's what was moving near the close:

Google (up $8.50 to $429.00, Charts) rallied more than 2 percent and gave the Nasdaq a boost on talk that the Web search giant might acquire online video service YouTube Inc. The companies announced a deal shortly after the close.

Cablevision Systems (up $2.53 to $26.46, Charts) jumped 10 percent after the Dolan family that controls the cable operator said it offered to buy the remaining shares it does not already own in a deal that values the company at $7.9 billion.

PNC Financial Services Group (down $3.12 to $70.48, Charts) said it agreed to buy Mercantile Bankshares (up $8.16 to $44.94, Charts) for $6 billion in cash and stock, sending shares of the regional bank down close to 5 percent.

And GlaxoSmithKline (up $0.02 to $54.33, Charts) said it agreed to buy consumer health care product maker CNS (up $8.16 to $36.72, Charts) for $566 million, or $37.50 a share.

In broker action, Mastercard (down $2.37 to $72.78, Charts) sank 3.5 percent after Goldman Sachs and Citicorp both downgraded the credit card company.

Sprint Nextel (down $0.40 to $18.08, Charts) fell 2 percent after the wireless provider was downgraded by UBS to neutral from buy and Verizon (down $0.10 to $36.70, Charts) fell nearly 1 percent after a Citigroup downgrade to sell from hold.

Grocery-store chain Kroger (up $0.22 to $22.71, Charts) was downgraded to "sell" from "neutral" at Banc of America Securities.

On the upside, Citigroup upgraded AT&T (up $0.37 to $32.15, Charts) to buy from hold and Advanced Micro Devices (down $1.05 to $22.96, Charts) was upgraded to neutral from reduce at UBS.

Market breadth was positive. On the New York Stock Exchange, winners beat losers by five to three on volume of 1.3 billion shares. On the Nasdaq, advancers edged out decliners by three to two on volume of 1.5 billion shares.

COMEX gold for December delivery rallied $6 to $582.80 an ounce.

Stocks in Asia fell, with South Korea's main stock index tumbling 2.4 percent and Hong Kong's Hang Seng index losing more than 1 percent. Japan's market was closed for a holiday.

European shares ended mixed.

The dollar reached eight-month highs against Japan's yen.

Treasurys were not trading due to the Columbus Day holiday.

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