With the market closed for Good Friday, traders had their first opportunity to react to Labor Department data that showed stronger-than-expected job growth in March. The numbers indicated the economy might be in better shape than previously thought, and helped offset concerns about a continued slowdown in the housing market.

Takeover activity also provided some lift to the markets, with reports Dow Chemical Co. has been targeted by Middle Eastern investors and U.S. buyout firms in a deal that could be worth $50 billion. It would be the biggest leveraged buyout on the books.

But upbeat news about the U.S. economy and corporate activity was interpreted by some on Wall Street as reasons for the Federal Reserve to hold off on cutting rates. And, with corporate earnings season to begin when Alcoa Inc. posts results Tuesday — and profit growth levels expected to fall from previous quarters — investors had reason to be cautious.

"All things point to the Fed, and now it looks like they are going to put rates on the back burner for a while after Friday's numbers," said Jay Suskind, head trader at Ryan Beck & Co. "And, now the markets are looking toward earnings reports where expectations have already been tempered."

According to preliminary calculations, the Dow Jones industrials rose 8.94, or 0.07 percent, to 12,569.14.

Broader stock indicators were mixed. The Standard & Poor's 500 index edged up 0.85, or 0.06 percent, to 1,444.61, and the Nasdaq composite index fell 2.16, or 0.09 percent, to 2,469.18.

The Russell 2000 index of smaller companies fell 1.71, or 0.21 percent, to 811.64.

Monday's modest moves left intact last week's advance; the major indexes rose each day last week and returned to positive territory for the year. Most major European markets were closed Friday and Monday for an extended Easter holiday.

The Labor Department report showed nonfarm payrolls rose by 180,000 in March, above forecasts of 135,000. The unemployment rate fell to 4.4 percent, a five-month low. Should the economy be stronger than some analysts estimated, it could dissuade the central bankers from lowering interest rates in the near term.

"The positive influence of the jobs report, along with more M&A activity this morning, has been overshadowed by expectations that a rate cut is farther off in the distance," said Michael Sheldon, chief market strategist at Spencer Clarke.

The report caused the bond market to fall sharply during a shortened trading day on Friday. Bonds held steady from Friday's sell-off, with the yield on the benchmark 10-year Treasury note at 4.75 percent.

The dollar rose against other major currencies, while gold prices slipped.

Oil prices continued their steep decline, with a barrel of light sweet crude settling down $2.77 to $61.51 per barrel on the New York Mercantile Exchange. Tensions in the Middle East pushed crude higher in recent weeks, and eased after Iran released 15 British soldiers and marines. There is also speculation among traders that an Energy Department report will show higher-than-expected U.S. inventories.

Investors looked toward recent takeover activity as a sign that companies remain confident about the business climate.

Dow Chemical spiked $2.16, or 4.9 percent, to $46.63 after British tabloid The Sunday Express reported it could receive a buyout offer of $50 billion as soon as this week. Kohlberg Kravis Roberts & Co., one of the biggest U.S. private equity firms, is said to be among the bidders.

This would mark the biggest leveraged buyout, dwarfing recent deals like the $32 billion takeover of energy company TXU Corp. that was announced in February. That deal — led by KKR and Texas Pacific Group — will go down as the largest private equity deal to date if it is approved by regulators and shareholders.

Citigroup Inc. rose 1 cent to $51.58 after it announced the acquisition of Taiwan's Bank of Overseas Chinese to broaden operations in Asia, and particularly in the greater China region. The bank also said it will detail a long-expected cost-cutting plan on Wednesday.

Burlington Northern Santa Fe Corp. rose $5.36, or 6.5 percent, to $88.08 after Berkshire Hathaway Inc. announced it bought a 10.9 percent stake. Berkshire — whose class A shares rose $151 to $109,000 — also confirmed it has made significant investments in two other railroads, but did not disclose their names.

Advanced Micro Devices Inc. warned its first-quarter revenue would miss Wall Street's expectations due to sharply weaker sales results at its computing solutions unit. However, the stock rose 49 cents, or 3.8 percent, to $13.35 after the chip maker said it will cut costs.

American Home Mortgage Investment Corp. sank after the lender cut its 2007 profit forecasts and several analysts downgraded the stock. The company's shares fell $3.92, or 15.2 percent, to $21.92.

Other lenders that have been in focus because of their subprime portfolios also fell. Accredit Home Lenders Holding Co. fell 41 cents, or 4.3 percent, to $9.23; and M&T Bank Corp. fell 72 cents to $105.27.

Power company Mirant Corp. said it is exploring the possibility of selling the company, sending shares up $3.44, or 8.5 percent, to $44.08. The company emerged from bankruptcy last year, and had been considered a takeover candidate after rival TXU was acquired. The stock hit a fresh 52-week high of $45.99 Monday, eclipsing a previous high of $42.

Declining issues barely outpaced advancers on the New York Stock Exchange, where consolidated volume came to 2.32 billion shares compared with 2.31 billion shares traded Thursday.

On the Web:

New York Stock Exchange: http://www.nyse.com