Stocks end mixed as Senate votes on tax deal

NEW YORK (CNNMoney.com) -- U.S. stocks finished a lackluster session mixed Monday as investors mulled over a flurry of corporate deals and awaited resolution on the tax-cut deal from Washington.

The Dow Jones industrial average (INDU) ticked up 18 points, or 0.2%, the S&P 500 (SPX) rose less than a point, and the Nasdaq (COMP) edged down 13 points, or 0.5%.

Fifteen components of the Dow 30 gained, and fifteen lost ground. Caterpillar (CAT, Fortune 500), Chevron (CVX, Fortune 500) and Merck (MRK, Fortune 500) were the biggest winners, while Hewlett-Packard (HPQ, Fortune 500), Bank of America (BAC, Fortune 500) and Intel (INTC, Fortune 500) led the declines.

Markets churned higher last week, with the S&P 500 reaching its highest level in two years on Friday, amid upbeat economic news and a dividend hike by General Electric.

The S&P 500 is up more than 83% from its 2009 low and is 11% higher for the year, Sam Stovall, chief investment strategist at S&P, said in a research note.

With no market-moving economic data out Monday, gains were muffled as investors awaited the next steps from Washington.

Early last week, policymakers appeared to be on the brink of reaching a compromise to extend Bush-era tax cuts for another two years. But House Democrats voted Thursday against considering the tax package.

On Monday senators opened debate about the deal, with an initial vote beginning at 3 p.m. ET. Shortly after the closing bell, the Senate voted to end debate on the compromise, according to an unofficial CNN count.

Despite the resistance from House Democrats, investors are still betting on an extension of the cuts, said Alan Lancz, president of Alan B. Lancz & Associates.

"Right now the momentum is definitely in the bull's favor," Lancz said. "I think the upward trend will continue as investors feel pressure to jump on the bandwagon."

Companies: Corporate dealmaking talk greeted investors Monday.

General Electric (GE, Fortune 500) offered $1.3 billion for Wellstream Holdings, an engineer and manufacturer of products for oil and gas transportation in the subsea production industry. Shares of GE closed 0.6% lower.

Thermo Fisher Scientific (TMO, Fortune 500), the parent company of Thermo Scientific and Fisher Scientific, announced that it would acquire Dionex (DNEX) for about $2.1 billion. That's $118.50 per share in cash, a 21% premium to Dionex's closing stock price on Dec. 10. Shares of Thermo Fisher, a leading manufacturer and marketer of chromatography systems, gained about 5%, while Dionex shares surged 20%.

Dell (DELL, Fortune 500) announced that it has purchased data storage company Compellent Technologies (CML) for $27.75 per share in cash. Last Thursday, Dell announced it was in talks with Compellent about a potential deal. Shares of Dell fell 3.9% Monday, while shares of Compellent slid 2.5%. The deal is a "take-under," since it valued Compellent at a lower price than its previous close.

Shares of FedEx (FDX, Fortune 500) closed slightly higher on what was projected to be the delivery giant's busiest day of the year. The company expects to move nearly 16 million shipments around the world on Monday.

World markets: Asian markets ended higher. The Shanghai Composite surged 2.9%, the Hang Seng in Hong Kong added 0.7% and Japan's Nikkei rose 0.8%.

China's economy has been booming, fueling fears of an imminent interest rate hike. There has been speculation for several weeks that China's government would boost interest rates to slow economic growth. So far, a rate hike has yet to be announced.

"If they raise their rates, it slows down their economy," Lancz said. "China's really a key cog in global economic growth, so if China slows down that's going to affect everything."

China's growth impacts the U.S. recovery, which is relying heavily on exports.

Separately, Chinese consumer prices rose 5.1% for the 12 months ended Nov. 30, according to government data released Saturday. That came on the heels of a 4.4% jump in October. And once again, a surge in food costs was the culprit, with prices up 11.7% during the month.

European stocks also finished ahead. Britain's FTSE 100 ticked up 0.8%, the DAX in Germany edged up 0.3% and France's CAC 40 added 0.9%.

Economy: No major economic reports were on tap Monday, but a raft of reports on unemployment, consumer prices and new home construction will be released later in the week.

The Federal Reserve will also release a statement Tuesday after policymakers meet.

Bonds: The price on the benchmark 10-year U.S. Treasury edged higher Monday, pushing the yield down to 3.29%. Bond prices and yields move in opposite directions.

From its October low, the 10-year yield has climbed nearly 100 basis points, Stovall said.

"Investors are encouraged that the U.S. government is willing to entertain extending the existing tax plan, as well as cut payroll taxes and encourage capital spending," he explained. "Bond investors, however, feel as if a lump of coal has been dropped into their stockings and have sold."

Currencies and commodities: The dollar fell against the British pound, the Japanese yen and the euro.

Oil for January delivery gained 82 cents to settle at $88.61 a barrel.

Gold futures for February delivery jumped $13.10 to settle at $1,398 an ounce.