After opening slightly higher, the advance of the major market indices gained steam and were in the neighborhood of their session highs late this morning, led by the

S&P 500

, which has surged 1%.

The S&P 500 was up 17 to 1256. The

Dow Jones Industrial Average

was up 112 to 9452. The

Nasdaq Composite Index

was up 24 to 2308. The

Russell 2000

was up 5 to 397.

TheStreet.com Internet Sector

was up 12 to 483.

TheStreet.com E-Commerce Index

was up 3 to 97.

Stocks were buoyed in part on a host of merger and acquisition news that has hit the market.

The 30-year Treasury bond was up 10/32 to 98 11/32, yielding 5.36%. For more on the Treasury market, please see

this morning's Bond Focus.

Looming ahead to later this week,

Federal Reserve

Chairman

Alan Greenspan

kicks off his semiannual

Humphrey-Hawkins

testimony on the state of the economy. The Fed chief is slated to appear before the

Senate Banking Committee

tomorrow and the

House Banking Committee

on Wednesday.

On the

New York Stock Exchange

, advancers were beating decliners 1,783 to 951 on 293 million shares. On the

Nasdaq Stock Market

winners were beating losers 1,911 to 1,577 on 351 million shares.

On the NYSE, 35 issues had set new 52-week lows while 21 had touched new highs. On the Nasdaq, 46 issues had set new lows while new highs totaled 28.

On the Big Board,

America Online

(AOL)

was most active with 7 million shares changing hands. It was up 9 1/16 to 169 1/2. AOL unit

Compuserve

is expected to unveil a major makeover of its online offerings, in an effort to sell itself to advertisers as an elite and upscale corner of the Net,

The Wall Street Journal

reported.

On the Nasdaq,

Dell

(DELL) - Get Report

was most active on 19 million shares. It was up 2 13/16 to 82 13/16.

Tech Focus

Among some of the tech indices, the

Morgan Stanley High-Tech 35

was up 2%, while the

Nasdaq 100

was up 1%. The

Philadelphia Stock Exchange Semiconductor

Index was up 3%. The

Philadelphia Stock Exchange Computer Box Maker Index

was up 4%.

Rambus

(RMBS) - Get Report

was surging, up 10 3/16, or 14%, to 81 3/8.

BancBoston Robertson Stephens

hardware analyst Daniel T. Niles today upgraded Rambus to buy from long-term attractive.

Niles set a $90 price target on the stock.

On Friday,

Morgan Stanley Dean Witter

analyst Mark Edelstone had positive words for Rambus , helping boost the stock.

Meanwhile,

Gateway

(GTW)

has leapt 5 1/4, or 7%, to 78 1/8 on an upgrade from Piper Jaffray's Ashok Kumar. Kumar upgraded Gateway to strong buy from buy and raised his price target on Gateway to between $95 and $100 from $56.

Meanwhile, BancBoston Robertson Stephens' 16th annual

Technology Conference

kicks off today in San Francisco. TheStreet.com previewed the conference in a story

today.

In other tech news,

3Com

(COMS)

unit

Palm Computing

, unveiled the

Palm V

and the

Palm IIIx

today. 3Com was up 15/16 to 34 1/8.

In the Newsletters

Dozens of new startups hoping to sell personal computer products over the Web are apparently waiting in the wings to join

Buy.com

and other new Internet resellers that have emerged in recent months, in some cases undercutting prices VARs can get from their suppliers by as much as 9%, industry executives said, according to an article in the latest issue of

Computer Reseller News

. The article says that upward of 40 new online resellers have approached

Compaq

(CPQ)

hoping to become authorized, said Mike Pocock, Compaq's vice president of U.S. channel sales. So far Compaq has turned them away because "they bring no value-add," Pocock is quoted in the article as saying.

10:58 a.m.: Stocks Hold Slight Gains in Lackluster Trading

The major market averages were higher at midmorning amid a rush of merger-and-acquisition news.

The

Dow Jones Industrial Average

was up 26 to 9366, while the

S&P 500

was up 5 to 1245.

The

Nasdaq Composite Index

was up 2 to 2286. The small-cap

Russell 2000

was up 3 to 395.

TheStreet.com Internet Sector

was up 3 to 474.

TheStreet.com E-Commerce Index

was up 1 to 96.

The 30-year Treasury bond was up 8/32 to 98 10/32, yielding 5.37%.

In M&A news, a couple of big deals were announced in the energy sector.

Dominion Resources

(D) - Get Report

is buying

Consolidated Natural Gas

(CNG)

for $6.3 billion in stock. The new company will be the nation's fourth-largest electric and natural gas utility, the companies said. Consolidated is one of the nation's largest producers, transporters, distributors and retail marketers of natural gas. Richmond, Va.-based Dominion was down 1 3/4 to 40 1/2, while Consolidated, based in Pittsburgh, was down 5/16 to 55 15/16.

Elsewhere,

Sempra Energy

(SRE) - Get Report

is acquiring

KN Energy

(KNE)

, a natural gas company based in Lakewood, Colo., for $1.8 billion in cash and stock. The deal also calls for Sempra assuming $4.2 billion in KN Energy debt. The companies see the deal closing in six to eight months. San Diego-based Sempra is an energy services holding company.

News of the deals helped lift the

American Stock Exchange Natural Gas Index

2%.

Brokerage stocks were soaring. The

American Stock Exchange Broker/Dealer Index

was up 3%. Retail stocks were enjoying solid gains. The

S&P Retail Index

was up 1%.

Elsewhere, transportation stocks gained. The

Dow Jones Transportation Average

was up 2%.

Meanwhile, lurking in the background of today's action is

Federal Reserve

Chairman

Alan Greenspan's

upcoming semiannual

Humphrey-Hawkins

testimony on the state of the economy, which is slated to kick off tomorrow.

As for activity, some market participants grumbled the market lacked direction and was listless.

"This is a sort of a continuation of last week," said Peter Coolidge, managing director of trading at

Brean Murray Foster Securities

. He said activity so far was lackluster with not much direction.

"We're not seeing a lot of activity one way or another."

On the

New York Stock Exchange

, advancers were beating decliners 1,600 to 943 on 174 million shares. On the

Nasdaq Stock Market

winners were beating losers 1,685 to 1,414 on 218 million shares.

On the NYSE, 29 issues had set new 52-week lows while 13 had touched new highs. On the Nasdaq, 35 issues had set new lows while new highs totaled 23.

On the Big Board,

America Online

(AOL)

was most active with 39 million shares changing hands. It was up 4 9/16 to 164 15/16. AOL unit

Compuserve

is expected to unveil a major makeover of its online offerings, in an effort to sell itself to advertisers as an elite and upscale corner of the Net,

The Wall Street Journal

reported.

On the Nasdaq,

Dell

(DELL) - Get Report

was most active on volume of 10 million shares. It was up 1/4 to 80 7/16.

9:55 a.m.: Stocks Open Modestly Higher

Stocks opened slightly higher as Wall Street digests a slew of merger-and-acquisition news.

Looming ahead tomorrow,

Federal Reserve

Chairman

Alan Greenspan

kicks off his semiannual

Humphrey-Hawkins

testimony on the state of the economy.

The

Dow Jones Industrial Average

was up 13 to 9353. The

S&P 500

was up 3 to 1242. The

Nasdaq Composite Index

was up 1 to 2284. The

Russell 2000

was up 2 to 394.

TheStreet.com Internet Sector

was down 2 to 470.

TheStreet.com E-Commerce Index

was up 1 to 96.

The benchmark 30-year Treasury bond was up 6/32 to 98 8/32, yielding 5.37%.

Meanwhile,

BancBoston Robertson Stephens'

16th annual

Technology Conference

kicks off today in San Francisco. TheStreet.com previewed the conference in a story

today.

Most Up at Open -- NYSE

America Online (AOL) , up 2 3/8 to 162 1/4

.

Most Up at Open -- Nasdaq

Rambus (RMBS) - Get Report, up 6 3/8 to 77 3/8

.

Most Down at Open -- NYSE

Eli Lilly (LLY) - Get Report, down 1 5/16 to 91 3/4

.

Most Down at Open -- Nasdaq

Vignette (VIGN) , down 4 5/16 to 38 3/8

.