Stocks End Session Mixed

Stocks ended little changed on Monday as interest rate concerns and a legal setback for Merck countered momentum from expectations of a multibillion-dollar acquisition by ConocoPhillips.

Forecasts for midweek snowstorms in the Northeast catapulted oil and natural gas prices on anticipation of increased near-term demand. The energy market also was riled by an Energy Information Administration report projecting that high oil prices were here to stay.

A barrel of light crude surged $1.91 to settle at $61.30 in New York trading.

In other markets, the dollar tumbled. Gold closed higher but well off its peak for the session, suggesting that profit taking could be setting in.

The stock market got an early boost from news that ConocoPhillips was expected to buy Burlington Resources in a deal worth almost $36 billion.

But higher oil prices, and a slide in the dollar at midday, clipped stocks’ gains -- although most market indexes recovered somewhat by the close.

The Dow Jones industrial average ended with a loss of 10.81 points, or 0.1%, to 10,767.77.

Among broader indexes, the Standard & Poor’s 500 rose 1.06 points, or 0.1%, to 1,260.43; the Nasdaq composite added 4.22 points, or 0.2%, to 2,260.95.

The dollar fell sharply against the yen and the euro as some currency traders bet that the Federal Reserve, at its meeting today, might hint that it was nearly done tightening credit. That could undermine the dollar’s appeal with foreign investors, traders say.

The buck fell to 119.75 yen from 120.64 on Friday. The euro jumped to $1.195 from $1.182.

The dollar also was under pressure from comments by Yu Yongding, an adviser to China’s central bank. He said the country should slow its accumulation of dollar reserves. In a subsequent interview with Market News International, he said China and other Asian nations should cut their dollar holdings.

The Fed is expected to lift its key rate from 4% to 4.25%. But investors are expected to focus less on the increase than on the official statement after the meeting -- and whether policymakers suggest that they will stay the course with rate hikes, or that the credit-tightening campaign might be near an end.

“People are waiting to see what kind of change in policy language is going to accompany that statement,” said Russ Koesterich, a portfolio manager at Barclays Global Investments.

Some investors sold bonds ahead of the meeting, pushing yields modestly higher. The 10-year Treasury note ended at 4.55%, up from 4.53% on Friday.

In the gold market near-term futures rose $1.40 to $528.40 an ounce, a new 24-year high, but the price slumped from an intraday high of $538.50. Many traders say the metal is overdue for profit taking.

In other market highlights:

* Energy stocks rallied after the Wall Street Journal reported Monday morning that ConocoPhillips might acquire natural-gas producer Burlington. The deal was announced after the market closed. Burlington soared $6.41 to $82.50; ConocoPhillips fell $1.82 to $61.25.

* Rising gasoline and heating fuel prices again clouded the outlook for the holiday shopping season. But Wal-Mart Stores quelled some fears when it said its December same-store sales were in line with estimates, sending shares up 60 cents to $48.68.

* Dow component Merck tumbled 72 cents to $28.41 after a judge declared a mistrial in the first federal case over its Vioxx painkiller. After 18 hours of deliberations, a Florida jury could not reach a unanimous verdict on whether Merck failed to warn about the risks of taking Vioxx.

* Viacom, which is about to split into a cable network and a broadcast TV company, said Monday that its board had authorized the new cable company to repurchase as much as $3 billion of its own shares on the open market. Viacom’s Class B shares rose 24 cents to $34.65.

* Google rose $3.41 to $412.61 after Credit Suisse First Boston boosted its 12-month share price estimate by 19%, to $475, saying “momentum behind the online advertising market is accelerating” and will lift Google’s revenue. Separately, Google is among 12 stocks that will be added to the Nasdaq-100 index.