Updated from 4:20 p.m. EDT

Stocks closed in positive territory Monday, as merger buzz in the utility and brokerage sectors dueled with higher oil prices for investors' attention in the first trading session of the week.

The

Dow Jones Industrial Average

closed up 38.94 points, or 0.38%, to 10,384.34, after hovering around the flatline for much of the session. Meanwhile, the

S&P 500

was up 7.49 points, or 0.64%, to 1178.84, and the

Nasdaq Composite

added 12.32 points, or 0.63%, to 1979.67. The 10-year Treasury was down 4/32 in price to yield 4.28%, while the dollar was higher against the yen and lower against the euro.

"Following last Friday's better-than-expected jobs report, investors appear to have turned more positive on the outlook for the economy," said Michael Sheldon, chief market strategist with Spencer Clark LLC. "The Fed still remains an obstacle over the near term, but for the moment you could say investors see the glass as half-full."

Trading volume on the

New York Stock Exchange

was 1.81 billion shares, with advancers beating decliners by a 2-to-1 margin. Volume on the Nasdaq was 1.44 billion shares, with advancers again outpacing decliners 2-to-1.

"The biggest problem is that there is anemic cash flow," says Dave Briggs, head of equity trading with Federated Investors. "The domestic markets aren't seeing cash flow coming. Basically, we don't have the animal spirit of people putting money into the market. If this keeps up, it's going to be a boring summer."

"There's a fair amount of negative sentiment," says Ken Tower, chief market strategist with CyberTrader. "The market is looking for good news to spark a rally. However, I don't see any type of catalyst that can cause a spark today or tomorrow."

Crude prices were higher for the fourth straight session. Oil rose $1.07 to close at $52.03 a barrel on the Nymex in choppy trading.

On the economic front, the March readings on wholesale inventories showed a 0.4% rise, compared with an expected 0.7% increase. Sales at U.S. wholesalers increased 0.2% for the month. Economists expected that wholesaler sales could show a strong jump after February's first decline in about two years. Petroleum sales rose 9.2%, the largest increase in two years.

"I'm looking at a market that is caught in between the push and pull," says Barry Hyman, equity market strategist with Ehrenkrantz King Nussbaum. "We're going to see as many weak numbers as we're going to see strong numbers. I think the next important economic information we'll get will be the

Fed's

FOMC minutes, so we can see the real indications."

Stronger sectors Monday included energy, retail, biotech and utilities. Weaker areas included hardware, semiconductors and software.

Stocks rose last week, with the Dow posting its third up week in a row, helped along by Kirk Kerkorian's tender offer for 5% of

General Motors

(GM)

and a handful of mergers. GM kept its dividend intact Monday, saying it would pay its regular 50-cent quarterly dividend June 10 to holders of record May 19. GM closed higher by 57 cents, or 1.8%, to $31.33.

Corporate deal-making continued to set the tone Monday, with

Duke Energy

(DUK)

agreeing to acquire

Cinergy

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for stock worth $45.80 a share, or about $9.1 billion. The combined company will have 3.7 million retail electric customers and 1.7 million retail gas customers in Ohio, Kentucky, Indiana, North Carolina, South Carolina and Ontario. Shares of Duke lost 54 cents, or 1.8%, to $28.82, while Cinergy rose $1.94, or 4.8%, to $42.32.

Shares of

Hewlett-Packard

(HPQ)

held the Dow back after Banc of America Securities said the company could trim 5% to 10% off of earnings expectations. H-P is due to announce quarterly earnings on May 17. Shares fell 24 cents, or 1.1%, to $20.74.

Shares of

Ameritrade

(AMTD)

surged Monday after reports that rival online trader

E*Trade

(ET)

has formally expressed interest in acquiring the company. Shares of Ameritrade jumped $2.11, or 18.7%, to close at $13.42. E*Trade shares rose 69 cents, or 5.8%, to $12.62.

Qwest Communications

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is again in talks with

MCI

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shareholders, believing it might be able to generate support to vote down rival

Verizon's

(VZ)

$8.5 billion offer, according to

The Wall Street Journal

Monday. A vote by MCI shareholders on the Verizon offer could be held as soon as late June or early July. Qwest fell 2 cents, or 0.6%, to $3.50, and MCI was down 2 cents, or 0.1%, to close at $25.79. Verizon dipped 2 cents, or 0.06%, to $34.54.

Lucent Technologies

(LU)

surged 13.2% after

Barron's

over the weekend wrote that shares have bottomed at current levels. The stock was trading at almost three times the normal volume. Lucent was up 34 cents to close at $2.92.

McDonald's

(MCD)

said global systemwide sales increased 6.7% in April, while same-store sales for the fast-food chain rose 2.8%. The company's U.S. business posted a 4.7% comparable sales gain in April. In Europe, April comparable sales were down 0.7% vs. last year's 5% increase. The company said April 2005 results were hurt by the timing of Easter and school holidays. McDonald's added 74 cents, or 2.5%, to $30.12.

Shares of

Mannatech

(MTEX)

dropped 26% after

Barron's

profiled the company over the weekend and questioned its marketing structure. The article also discussed a civil suit filed against the company and its CEO Samuel Caster. Mannatech was down $5.32 to finish at $15.11.

In earnings news, oil and gas company

Dynegy

(DYN)

reported a first-quarter loss of $262 million, or 70 cents a share, compared with earnings of $70 million, or 14 cents a share, a year ago. The latest quarter includes a $156 million settlement of a class-action lawsuit. Quarterly revenue fell to $1.5 billion from $1.66 billion a year ago. Shares gained 47 cents, or 12.5%, to $4.24.

Mobile phone distributor

Brightpoint

(CELL)

posted first-quarter net income of $2.9 million, or 16 cents a share, compared with a loss of $2.2 million, or 11 cents a share, a year ago. Excluding items, earnings were 14 cents a share, lower than the Thomson First Call consensus of 20 cents a share. The company blamed the results on its French operations, which posted a $3.6 million loss. Brightpoint is exploring its strategic options in that country. Brightpoint was also hit with a $1.2 million charge for consolidating facilities in Australia. Shares lost $1.33, or 6.6%, to $18.77.

Edison International

(EIX)

reported consolidated first-quarter earnings of 61 cents a share, up from 30 cents a year ago. Revenue totaled $2.4 billion. A year ago, the company had revenue of $2.1 billion. Edison was higher by $1.31, or 3.6%, to close at $37.80.

In brokerage moves, UBS upgraded shares of

Cablevision Systems

(CVC)

to buy from neutral, citing the belief that the company continues to set the industry standard. Cablevision added 5 cents, or 0.2%, to $26.95.

Wachovia Securities raised its rating for

Murphy Oil

(MUR)

to outperform from market perform, citing a recent pullback in the shares. Murphy Oil rose $2.46, or 2.8%, to $90.97.

J.P. Morgan downgraded

Sara Lee

(SLE)

to underweight from neutral, citing the belief that the company's fair value is 10% to 15% below currents levels. Shares fell 25 cents, or 1.2%, to $21.30.

Overseas markets were mostly lower, with London's FTSE 100 down 0.2% to 4910, and Germany's Xetra DAX falling 0.4% to 4292. In Asia, Japan's Nikkei fell 0.2% overnight to 11,171, while Hong Kong's Hang Seng gained 0.4% to 14,085.

The first-quarter earnings season continues this week with major reports expected from

Dell

(DELL)

,

Disney

(DIS)

and

Wal-Mart

(WMT)

. Tuesday will bring earnings reports from

Cisco Systems

(CSCO)

and

May Department Stores

(MAY)

.

To view Aaron Task's video update on today's market, click here.