Dow gains at end of mixed day

NEW YORK (CNNMoney.com) -- Blue chips rose and the broader market was little changed at the end of a choppy session on Wall Street Monday, in which investors weighed seesawing oil prices, a weak read on manufacturing and a spate of corporate deals.

The Dow Jones industrial average (up 27.95 to 12,382.30, Charts) and the broader S&P 500 (up 3.69 to 1,424.55, Charts) index both gained over 0.2 percent. The Nasdaq (Charts) composite ended little changed.

Stocks had swayed on both sides of unchanged throughout the session as investors weighed the competing influences.

Trading volume was moderate, ahead of the start of Passover. Stock markets are closed Friday for Good Friday.

No market moving earnings or economic news is expected Tuesday, with investors looking to the March employment report at the end of the week for the next indication about the health of the economy.

Ahead of that, reports are due Wednesday on factory orders and the services sector of the economy.

Stocks were mixed Friday at the end of an upbeat month and a volatile quarter on Wall Street. The new quarter started off on a quiet note, as investors welcomed the day's deals news, but held back a bit at the start of a big week for economic reports.

The first report of the week was not entirely encouraging.

The Institute for Supply Management's manufacturing index fell to 50.9 in March from 52.3 in the previous month, just short of forecasts for a drop to 51.

Prices paid, the report's inflation component, jumped to 65.5 percent from 59 in February.

"It's a mixed day today," said Peter Cardillo, chief market economist at Avalon Partners. "M&A activity is plentiful, but the ISM was negative, and that's rekindling fears about the economy."

A slowing economy paired with higher inflation, as the ISM report seemed to indicate, would be particularly troublesome for the Federal Reserve to manage and for stock investors to handle.

Afternoon comments from Federal Reserve Bank of St. Louis president William Poole reasserted the central bank's recent stance that inflation is the Fed's main concern. He said that should inflation flare up, he would be prepared to vote for a rate increase. However, he also said that he expected price pressure to abate in the months ahead.

First Data (up $5.55 to $32.45, Charts) agreed to be bought for $429 billion in cash by private equity firm Kohlberg Kravis Roberts & Co. However, the credit card and payment processor also said it plans to actively seek other bids. First Data shares jumped 20.6 percent in active New York Stock Exchange trading. (Full story).

In other deals news, real estate developer Sam Zell has won the bidding war for newspaper publisher Tribune (up $0.70 to $32.81, Charts) in a $13 billion deal. Tribune also said it would sell the Chicago Cubs after the 2007 season as a means of cutting debt. (Full story).

Xerox said it is buying Global Imaging Systems (up $9.14 to $28.64, Charts) for $1.5 billion in cash, sending shares of the regional printer up 47 percent. Xerox (up $0.19 to $17.08, Charts) shares added 1 percent. (Full story).

Additionally, EMI Group has struck a deal with Apple's iTunes to sell its music catalog without so-called anti-piracy protection, known as DRM restrictions. Apple (up $0.74 to $93.65, Charts) shares rose modestly on the news. (Full story).

Altria Group (up $2.32 to $68.22, Charts) said late Friday that it has completed its spin-off of Kraft Foods. Kraft (down $0.81 to $30.85, Charts) shares slumped Monday in active trade on its first day as an independent company. Altria shares gained.

Merck (up $0.84 to $45.01, Charts) shares jumped on weekend news that the U.S. Food and Drug Administration has granted approval for its diabetes treating pill, Janumet.

In other news, New Century Financial, the most high profile example of the subprime mortgage lending meltdown, filed for bankruptcy protection Monday morning. Shares of New Century (down $0.15 to $0.92, Charts) slumped 15 percent.

A variety of oil, gold and natural gas stocks all jumped, with the commodities sector providing some support for the broader stock market.

Market breadth was mixed. On the New York Stock Exchange, winners topped losers 5 to 3 on volume of 1.5 billion shares. On the Nasdaq, decliners and advancers were roughly even on volume of 1.76 billion shares.

Investors also kept an eye on oil prices.

U.S. light crude oil for May delivery rose 7 cents to settle at $65.94 a barrel on the New York Mercantile Exchange, giving back bigger gains. Prices have been on the rise recently amid worries about the conflict with Iran, the world's No. 4 exporter.

COMEX gold for June delivery rose $2.50 to settle at $671.50 an ounce.

Treasury prices were little changed, with the yield on the 10-year note at 4.64 percent, roughly where it stood late Friday. Bond prices had seesawed throughout the session.

In currency trading, the dollar slipped modestly versus the euro and was little changed versus the yen.

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