Updated from 4:02 p.m. EST

Stocks closed modestly higher Monday as election uncertainty mostly offset the optimism created by slumping oil and

Oracle's

(ORCL) - Get Report

sweetened bid for

PeopleSoft

(PSFT)

.

The

Dow

added 26.90 points, or 0.27%, to 10,054.40; the

S&P 500

rose 0.31 points, or 0.03%, at 1130.51; and the

Nasdaq

rose 4.88 points, or 0.25%, to 1979.87, a new four-month closing high. The 10-year Treasury bond fell 16/32 to yield 4.09%, while the dollar was higher against the yen and the euro.

Volume was light on the

New York Stock Exchange

, where 1.3 billion shares traded and advancers beat decliners by a margin of 3 to 2. At the Nasdaq, 1.5 billion shares changed hands, with advancers even with decliners.

"For the most part, people are sitting up on the sidelines waiting to close out this presidential election -- hopefully with a clear winner," said Robert Pavlik, portfolio manager at Oaktree Asset Management.

"There are lot of opportunities left in stocks, and although certain sectors may do better or worse depending on who wins the election," Pavlik said. "In the long run, stocks will continue to go up."

Oil futures fell sharply, with December crude ending down $1.63 a barrel to a one-month low of $50.13. The contract is now down more than 10% since last Wednesday.

"The improvement that we've been seeing in the markets over last week and today suggests to us that you're probably setting yourself up for a good year-end rally," said John Hughes, managing director at Epiphany Equity Research.

What the market doesn't want is a disputed result in Tuesday's election.

"If we don't have finality, then the market is going to drift lower," said Al Goldman, chief market strategist at A.G. Edwards.

A variety of polls show little or no election impact from Friday's Osama bin Laden videotape, in which the al-Qaeda leader is purported to be shown saying neither presidential candidate would spare the U.S. from more terrorism. A survey carried out between Friday and Sunday by

The Wall Street Journal

and NBC put nationwide support for President Bush at 48% and Sen. John Kerry at 47%.

The government said that personal income in the month of September rose 0.2%, from 0.4% in the prior month, while personal spending climbed 0.6%, after being flat in the prior month. Analysts had forecast a 0.3% rise in personal income, while expecting a 0.4% rise in personal spending. The government also reported that construction spending for September was unchanged at 0.8%. Experts had forecast a rise of 0.4%.

The Institute for Supply Management said its manufacturing index fell in October to 56.8, from 58.5 in the prior month. Analysts had expected the index to fall to 58.

Among stocks, PeopleSoft rose and Oracle fell after the latter raised its takeover offer to $24 from $21 a share in cash, calling the bid its "best and final" and warning it would walk away if it isn't accepted by PeopleSoft shareholders this week. The increased offer follows a decision last week by the European Union not to oppose the buyout on antitrust grounds.

PeopleSoft shares climbed $2.16 to $22.93, while Oracle's stock rose 9 cents to $12.75.

Tyco

(TYC)

said it swung to a fourth-quarter profit of $454 million, or 22 cents a share, from a loss of $297 million, or 15 cents a share, last year. Pro forma profit of 45 cents a share was 2 cents better than estimates, although the company guided first-quarter operating earnings to 40 cents to 42 cents a share, compared with estimates for 44 cents a share. Tyco ended up 55 cents, or 1.8%, to $31.70.

Humana

(HUM) - Get Report

said third-quarter earnings were $84.3 million, or 52 cents a share, compared with $62.1 million, or 38 cents a share, last year. Earnings in the latest quarter beat estimates by 8 cents a share, but the company warned that fourth-quarter net income will be 23 cents to 26 cents a share, short of the Thomson First Call consensus of 34 cents a share. Shares rose $1.20, or 6.3%, to $20.35.

Before the bell Monday,

Sysco

(SYY) - Get Report

released strong first-quarter earnings but missed revenue expectations, citing higher fuel costs and weather-related disruptions. The nation's largest food service distributor posted earnings of $225.9 million, or 35 cents a share, up 8.2% from last year and in line with analysts' estimates. Shares climbed 72 cents to $32.99.

Elsewhere, shares of

Accredo Health

(ACDO)

fell more than 4%, after the company missed Wall Street earnings forecasts by 10 cents. The company had earnings of $12.8 million, or 26 cents a share, down 27% year over year and well below analysts' estimates of 36 cents a share. The stock finished $1.00 lower at $22.03.

Shares of

DoubleClick

(DCLK)

climbed more than 11% Monday, amid rumors that it was interested in selling part or all of the company. The company has been working with investment bank Lazard Freres & Co. to examine ways to raise its capital and shareholder value. The stock gained 76 cents to $7.12.

Wal-Mart

(WMT) - Get Report

shares were down Monday, after the company said same-store sales in October were on the low side of expectations. The company said that in preliminary estimates, sales rose 2.8%. The company guided in the range of between 2% and 4%. Shares dropped 7 cents or $53.85.

Overseas markets closed mostly higher, with London's FTSE 100 gaining 1.1% to 4673.80 and Germany's Xetra DAX adding 1.3% to 4012.64. In Asia, Japan's Nikkei fell 0.3% overnight to 10,735, while Hong Kong's Hang Seng added 0.3% to 13,094.