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Stocks Edge Lower Ahead of Bell

Oil holds above $64 and IBM is downgraded at J.P. Morgan.

Stocks were flat to lower ahead of the bell Monday as oil held above $64 a barrel and shares of

IBM

(IBM) - Get International Business Machines Corporation Report

were downgraded.

Index futures recently showed the

S&P 500

trading about 2 points below fair value, while the Nasdaq 100 was set for a 1-point decline. The 10-year Treasury bond was up 1/32 in price to yield 4.37%, 2 basis points above the two-year yield, while the dollar fell against the yen and rose against the euro.

February crude, which jumped more than 5% last week as hedge funds put fresh money to work in commodity markets, was recently up another penny to $64.22 a barrel. Natural gas fell 4 cents to $9.59 per million British thermal units.

Overseas markets are higher, with London's FTSE 100 recently up 0.3% to 5748 and Germany's Xetra DAX adding 0.1% to 5544. In Asia, Japan's Nikkei was unchanged at 16,428, while Hong Kong's Hang Seng gained 1.3% overnight to 15,547.

The

Dow Jones Industrial Average

starts the week at its best point since mid-2001 after 3% gains in

Hewlett-Packard

(HPQ) - Get HP Inc. Report

and IBM paced a 77-point jump on Friday. Monday morning, shares of IBM were downgraded to neutral at J.P. Morgan, which said the stock's 10% run through the back half of 2005 has left it reasonably valued.

Two potential corporate transactions were making news in the health sector Monday. According to the

TheStreet Recommends

Wall Street Journal,

,

Tyco

(TYC)

is studying a plan to spin off its healthcare and electronics units in an effort to simplify its sprawling conglomerate structure. The stripped-down surviving company would focus on security and fire-detection equipment, pumps and valves.

Boston Scientific

(BSX) - Get Boston Scientific Corporation Report

, meanwhile, has added some detail of its $25 billion takeover offer for medical device company

Guidant

(GDT)

. Under a definitive offer outlined last night, Guidant said it has a deal to divest some of Guidant's coronary stent businesses to

Abbot Labs

(ABT) - Get Abbott Laboratories Report

if its $72-a-share cash and stock offer goes through.

Johnson & Johnson

(JNJ) - Get Johnson & Johnson Report

still has a $21.5 billion, or $64-a-share offer for Guidant on the table.