Major stock indexes inched lower in morning trading Monday as investors watched developments in Iraq. A batch of corporate merger news drove up shares in medical device maker Covidien and natural gas producer Williams Cos. Traders also bid up U.S. homebuilder shares following a report showing a sharp improvement in builders' confidence in the housing market.
KEEPING SCORE: The Standard & Poor's 500 index slipped two points, or 0.1 percent, to 1,920 as of 11:19 a.m. Eastern Time. The Dow Jones industrial average fell 28 points, or 0.2 percent, to 16,746. The Nasdaq composite dipped five points, or 0.1 percent, to 4,305.
ACQUISITION PRESCRIPTION: Covidien soared 21 percent after the Ireland-based medical device manufacturer agreed to be bought by U.S. competitor Medtronic. The deal is the latest in a series of acquisitions by medical-device manufacturers. Covidien rose $15.44 to $87.50. Medtronic fell 27 cents, or 0.4 percent, to $60.44.
ENERGY MARRIAGE: Williams Companies rose $11.50, or 21.4 percent, to $58.68 after announcing a deal to expand its stake in Access Midstream Partners.
ROSIER OUTLOOK: The National Association of Home Builders/Wells Fargo builder sentiment index rose to highest level since January. The latest report suggests homebuilders' confidence in the housing market is improving and lifted homebuilder stocks. UCP Inc. led the pack, adding 34 cents, or 2.5 percent, to $13.85.
WAIT AND SEE: Traders watched developments in Iraq with an eye on the Obama administration's next move as Sunni militants extended their violent advance. Secretary of State John Kerry said Monday that the Obama administration is open to discussions with Iran over the crisis and is considering airstrikes to slow the insurgency.
OIL: The price of crude continued to climb as Iraq's widening insurgency raised concerns that exports from OPEC's No. 2 oil producer could be affected. Oil rose 5 cents to $106.93 a barrel. Oil has risen 4 percent this month.
SECTOR SPOTLIGHT: Seven of the 10 sectors in the S&P 500 index rose, led by energy stocks. Industrial, financial and materials stocks fell.
BOND WATCH: In U.S. government bond trading, the yield on the 10-year note held steady at 2.60 percent.