Analysts said that with many traders on vacation and no economic news to guide the market, stocks were particularly vulnerable to concerns about soaring oil costs and the effect of rising interest rates on the economy.

"Higher oil prices, interest rates — that puts downward pressure on price-to-earnings ratios," said Charles H. Blood, senior financial markets analyst at Brown Brothers Harriman & Co. "The market is still struggling with this, but second-quarter earnings were good enough to offset that drop. That's why you have this sort of erratic behavior."

Crude oil futures inched up amid news that sabotage cut power to Iraq's only functioning oil-export terminals early today, temporarily halting shipments. A barrel of light crude settled at $65.45, up 10 cents on the New York Mercantile Exchange.

Stock trading volume was light — typical for a late-summer session — which tends to exaggerate the swings in the major indexes.

The Dow Jones industrial average closed up 10.66, or 0.1 percent, at 10,569.89. The Dow climbed nearly 82 points in morning activity before moving in and out of positive territory.

Broader stock indicators also ended slightly higher after giving up ground. The Standard & Poor's 500 index gained 2.02, or 0.17 percent, to 1,221.73, while the Nasdaq composite index advanced 5.85, or 0.27 percent, to 2,141.41.

Bonds ended lower, with the yield on the 10-year Treasury note rising to 4.22 percent from 4.21 percent Friday. The U.S. dollar was mixed against other major currencies in European trading, while gold prices finished unchanged.

Today's spate of merger news offered some support to the market, which has been searching for signs of confidence in the economy. Takeover shopping is often a signal that companies are feeling optimistic about business not only in the coming months, but over the next few years.

The day's acquisitions were led by a $4.18 billion offer from China National Petroleum Corp. for Canadian oil producer PetroKazakhstan Inc., as Chinese companies continue their buying spree of energy assets worldwide. PetroKazakhstan shares jumped $8.35 to close at $53.75.

Maytag Corp. signed a formal agreement to be acquired by rival appliance maker Whirlpool Corp. for more than $1.7 billion after investment firm Ripplewood Holdings reportedly said it won't raise its offer for Maytag. The end of the bidding war sent Maytag down 2 cents to $18.69, and Whirlpool down 35 cents to $81.48.

Additionally, OSI Pharmaceuticals Inc., a drug maker focused on cancer treatments, said it is acquiring Eyetech Pharmaceuticals Inc. for $20 per share — a 20 percent premium to Eyetech's Friday closing price. OSI said the $935 million buyout of Eyetech, which makes drugs for eye diseases, should fatten earnings for the next four years beginning in 2006. Eyetech shares surged $4.14, or 29.6 percent, to $18.13, while OSI fell $8.85, or 21.7 percent, to $31.92.

Elsewhere in the drug sector, Merck & Co. continued its decline following an unfavorable jury verdict last Friday in the first lawsuit over its once-popular painkiller Vioxx. Lawyers for Merck, which plans to appeal the case, have said the jury award of more than $250 million will likely be reduced to about $26 million because of Texas laws that limit punitive damages. Merck's shares slumped almost 8 percent after the decision, and slid another 17 cents to $27.89.

Panacos Pharmaceuticals Inc. rocketed nearly 50 percent after the company reported a recent mid-stage trial showed its experimental HIV drug reduced the amount of the virus in patients' blood by 90 percent. Shares jumped $3.25 to $10.30.

In earnings news, ketchup maker H.J. Heinz Co. said its profit slipped 19 percent in the fiscal first quarter, as higher costs offset sales growth led by increased North American volume. But setting aside one-time restructuring charges, Heinz's earnings and sales topped Wall Street expectations, sending shares up 39 cents to $36.69.

Advancing issues outnumbered decliners by about 5 to 3 on the New York Stock Exchange, where preliminary consolidated volume of 1.62 billion shares was up from the 1.56 billion shares traded Friday.

The Russell 2000 index of smaller companies rose 4.96, or 0.76 percent, to 657.47.

Overseas, Japan's Nikkei stock average surged 1.31 percent. Britain's FTSE 100 rose 0.11 percent, Germany's DAX index added 0.24 percent, and France's CAC-40 fell 0.04 percent.