Stocks Wriggle Upward

The market is ticking up slightly ahead of the Fed meeting and amid merger news and positive earnings reports from the likes of Verizon and Humana. Ford and Wrigley are also among the day's winners so far.
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Updated from 11:10 a.m. EDT

New York's major averages were modestly higher Monday as investors awaited the upcoming

Federal Reserve

gathering amid merger news and positive earnings reports.

The

Dow Jones Industrial Average

traded on both sides of the flat line before recently rising 18 points to 12,909. The

S&P 500

rose 2 points to 1400, and the

Nasdaq Composite

gained 6 points to 2428.

The Fed will begin its two-day meeting Tuesday, and it is widely expected to cut the fed funds target rate by 25 basis points. Many analysts also believe the central bank will signal a pause in its months-long easing cycle, which since September has taken the overnight lending rate down three percentage points to 2.25%.

On the corporate side, among the day's winners was

Wrigley

(WWY)

, which shot up 23.2% to $76.74 after Mars and Warren Buffett's

Berkshire Hathaway

(BRK.A) - Get Report

said they would acquire the chewing-gum outfit for roughly $23 billion, or $80 a share.

Wrigley also beat analysts' first-quarter expectations with earnings that surged 18.1% to $168.6 million, or 61 cents a share.

Rival

Hershey

(HSY) - Get Report

, meanwhile, climbed 4.9% on the hope that the chocolatier would seek a similarly generous bid. Britain's

Cadbury Schweppes

(CSG)

, which has discussed a potential merger with Hershey several times in the past, bumped up 2.9% on the

New York Stock Exchange

.

Ford

(F) - Get Report

was also advancing on word that Kirk Kerkorian's Tracinda has collected a 4.7% stake in the automaker, or about 100 million shares, and plans to offer $8.50 each for an additional 20 million shares. Ford was up 9.7% to $8.23.

Also, reports surfaced this morning that United Airlines parent

UAL Corp.

(UAUA)

is in "very advanced" talks to merge with

U.S. Airways

(LCC)

. The

Associated Press

said a merger announcement should come within two weeks. UAL shares slumped 5.5%; U.S. Airways bounced 6.8%.

The news came just as United said it would abandon talks with

Continental

(CAL) - Get Report

, which said this weekend it would

remain independent

. Continental stock lost 2.2%.

Elsewhere, Dow component

Verizon

(VZ) - Get Report

posted

in-line first-quarter earnings

, lifting shares by 1.9%. Separately, health insurer

Humana

(HUM) - Get Report

padded its full-year earnings guidance as first-quarter income jumped 12.5% and topped the average Wall Street consensus. Shares were up 1.2%.

On the losing side, conglomerate

Loews

(LTR)

reported that consolidated earnings -- which includes results from cigarette subsidiary

Carolina Group

(CG) - Get Report

-- slid 13.8% to $662 million. Both companies, by themselves, saw earnings declines from last year. Loews lost 5.3% as Carolina gave up 5.9%.

Back in merger news, the deadline for

Yahoo!

(YHOO)

to respond to

Microsoft's

(MSFT) - Get Report

takeover bid passed without any comment from either company. Shares of Microsoft shed 2.2%, while Yahoo! rose fractionally at $26.88.

Traders were also dealing with another new high for crude oil, which reached $119.93 a barrel before pulling back to a 24-cent gain at $118.76. Gold was adding $6.80 to $896.50 an ounce.

The U.S. dollar was slipping 0.4% against the euro at $1.5644 and fell 0.1% against the yen at 104.33.

That came as the European Union predicted that eurozone countries would see inflation spike to 3.2% this year, compared with 2.1% in 2007. The forecast could keep the European Central Bank from making cuts to its own benchmark lending rate, even as many of its member countries suffer economic slowdowns.

Treasury prices were modestly higher. The 10-year note stepped up 7/32 in price to yield 3.86%, and the 30-year bond added 3/32 in price, yielding 4.59%.

Markets overseas were mostly rising. The Nikkei 225 in Japan added 0.2% overnight, and the Hang Seng Index in Hong Kong climbed 0.6%. As for European bourses, London's FTSE 100 was ticking down, and Germany's Xetra Dax advanced 0.4%. The Paris Cac tacked on 0.7%.