NEW YORK (TheStreet) -- Major U.S. stock averages eked out gains Monday with the help of blue-chips McDonald's (MCD) and Hewlett-Packard (HPQ).
Meanwhile, as investors remained jittery about the political upheaval in Italy and the progress of averting the U.S. "fiscal cliff," Reuters reported that the Bank of Japan will likely ease monetary policy next week as the country's outlook continues to be clouded by the potential fallout from the U.S. budget and soft Chinese growth.
The Dow Jones Industrial Average closed up 15 points, or 0.11%, to 13,170. The blue-chip index, which came off a one-month closing high, began the session up more than 7.5% in 2012.
Breadth was positive, with winners outpacing losers 16 to 14. In addition to Hewlett-Packard and McDonald's, Cisco ( CSCO ) and Microsoft ( MSFT ) were a few of the biggest blue-chip winners.
Home Depot ( HD)
, Verizon ( VZ)
and Bank of America ( INTC)
were the sharpest decliners.
Hewlett-Packard shares jumped 2.6% amid rumors that billionaire activist investor Carl Icahn could be amassing a stake in the PC maker.
McDonald's shares added 1.1% after the fast-food giant reported an increase of 2.4% in global same-store sales for November, exceeding the average analyst estimate of only 0.1%, helped by the popularity of a breakfast menu in the U.S., and value meals and meal combinations in Europe. In October, McDonald's had posted its first decline in monthly sales in nine years.
The S&P 500
settled up half of a point, or 0.03%, at 1,419. The Nasdaq
increased 9 points, or 0.30%, at 2,987.
In the broader market, most sectors were in the green, led by advances in the transportation, technology, basic material and healthcare sectors. Only the consumer-cyclical and financial sectors slumped.
Volumes reached 2.96 billion shares on the New York Stock Exchange
, and were also weak at 1.52 billion shares on the Nasdaq. Advancers edged decliners 1.2-to-1 on the Big Board and 1.3-to-1 on the Nasdaq.
On the fiscal-cliff front, President Barack Obama visited a Daimler engine plant in Redford, Mich., Monday to make his case for raising taxes on the wealthiest Americans
"I've said I will work with Republicans on a plan for economic growth, job creation and reducing our deficits, and have some compromise between Democrats and Republicans," he told workers.
On Sunday, President Obama and House Speaker John Boehner met at the White House for the first time in 23 days to discuss resolving the fiscal cliff. Details of the conversation weren't revealed, but both offices said that the "lines of communication" remain open.
"Averting the cliff before Christmas will likely rally the S&P to 1,500 by year-end or early January, provided the 2013 fiscal drag does not exceed 1.5% and is not mostly tax hikes," said David Bianco, chief U.S. equity strategist at Deutsche Bank. "But further 2013 S&P upside will be sensitive to the legislation's details. If top income-tax-bracket rate hikes are curbed from what's scheduled, then the S&P should reach 1,550 by 2013's end. If the new top dividend tax rate is 25% or less, then the S&P should reach 1,600 by the end of 2013."
In Europe, Italy's 10-year bond yield spiked by more than 0.2 percentage points to 4.79% after technocrat Prime Minister Mario Monti said over the weekend he intends to resign once the country's 2013 budget passes into law, following the loss of support from former Prime Minister Silvio Berlusconi's PDL party. Monti's resignation sparked worries over efforts to repair the country's debt crisis.
Berlusconi announced that he will run for office again.
Monti had stepped in to replace Berlusconi after the Italian 10-year bond yield jumped to a record 7.48% in November 2011.
"The eurozone's political scene was thrown into uncertainty ... Monti's succession was always going to be a potential stumbling block for the eurozone's crisis resolution, and the credibility of Italy's reforms will undoubtedly face closer scrutiny in the coming months, and yields will react accordingly," said Geoffrey Yu, a currency strategist at UBS.
Gold for February delivery rose $8.90 to settle at $1,714.40 an ounce at the Comex division of the New York Mercantile Exchange, while January crude oil contracts dipped 37 cents to $85.56 a barrel.
The benchmark 10-year Treasury gained 2/32 to dilute the yield to 1.622%. The dollar was down 0.12%, according to the U.S. dollar index
In corporate news, American International Group (AIG)
said it plans to sell up to 90% of International Lease Finance Corp. (ILFC)
to a Chinese consortium led by Weng Xianding, chairman of New China Trust Co., for about $5.28 billion. AIG shares were off 2.3%.
announced Monday its plan to spin off its commercial and residential security businesses. The company also announced a new share-repurchase program of up to $2 billion of common stock and a dividend hike of about 31%. Shares were off 1.9%.
Shares of Nokia (NOK)
fell 4.2% on Monday after Oppenheimer urged investors to approach the handset maker with caution.
Shares of Intermec (IN)
soared 23% after the wired and wireless automated identification and data collection services company agreed to be acquired by Honeywell (HON)
for $10 a share in an all-cash transaction valued at about $600 million. Honeywell shares were down 0.18%.
Diamond Foods (DMND)
shares tumbled 10% after the company swung to a fiscal fourth-quarter loss as it was hit by charges tied to probes on its accounting scandal and the shuttering of a factory.
Marathon Petroleum ( MPC )
shares tacked on 2.2% after being named to Barron's list of 10 favorite stocks for 2013.
-- Written by Andrea Tse and Joe Deaux in New York.
>To contact the writer of this article, click here: Andrea Tse