Stocks barely budged Monday, finishing mixed as interest rate worries and a legal setback for Merck & Co. (MRK) countered momentum from a possible multibillion-dollar acquisition by ConocoPhillips (COP).

The Dow Jones industrial average lost 10.81, or 0.1 percent, to 10,767.77. Broader stock indicators were higher. The Standard & Poor's 500 index rose 1.06, or 0.08 percent, to 1,260.43, while the Nasdaq composite index advanced 4.22, or 0.19 percent, to 2,260.95.

Forecasts for midweek snowstorms in the Northeast catapulted energy prices on anticipation for increased demand, although OPEC said it will keep producing oil at current record levels before considering whether to scale back next year. A barrel of light crude surged $1.91 to settle at $61.30 on the New York Mercantile Exchange.

The market got an early boost from merger activity, while an upbeat analyst report on Google Inc. paced the tech sector. There was little economic news to guide the market Monday, but data on monthly retail sales, price inflation and manufacturing are scheduled for later this week.

Instead, Wall Street awaited the Federal Reserve's decision on interest rates Tuesday. While the Fed is expected to lift rates by a quarter percentage point to 4.25 percent, traders are hoping for indications the rate hikes will end soon. Recent economic strength has fed worries that the central bank might extend the increases.

"People are waiting to see what kind of change in policy language is going to accompany that statement," said Russ Koesterich, senior portfolio manager at Barclays Global Investments. "The question is, if the Fed is approaching (a neutral stance), how will its policy change in 2006?"

Koesterich said he believes the Fed is near the end of its rate tightening, which should help stocks. But if there's "evidence of an increase in core inflation, it's reasonable to assume that the Fed is going to continue hiking rates," he added.

Bond prices declined, with the yield on the 10-year Treasury note climbing to 4.55 percent from 4.53 percent late Friday. The dollar was mixed against other major currencies in European trading, while gold prices were off recent highs.

The Energy Department on Monday said crude oil is projected to remain well above $50 a barrel over the next 20 to 25 years because it does not expect OPEC to pump as much oil as previously planned. The report, however, also forecast a sharp price decline for natural gas, which added 52.9 cents to settle at $14.841 per 1,000 cubic feet on the Nymex.

Rising gasoline and heating fuel prices once again clouded the outlook for the key holiday shopping season, which Koesterich said remains a foremost concern on Wall Street. Wal-Mart Stores Inc. quelled some fears when it said its December same-store sales are 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.

ConocoPhillips is nearing a deal to acquire oil and gas producer Burlington Resources Inc. for more than $30 billion, The Wall Street Journal said Monday. Together, the companies' annual revenue would be more than $211 billion. ConocoPhillips fell $1.82 to $61.25, while Burlington surged $6.41 to $82.50.

The Journal also reported that apparel designer Tommy Hilfiger Corp. (TOM), which put itself up for sale in August, could have three takeover offers by Friday. Hilfiger lost 15 cents to $17.75.

Movie studio Paramount Pictures, a unit of Viacom Inc. (VIA), agreed to buy rival DreamWorks SKG Inc. in a $1.6 billion deal involving $775 million in cash and $825 million of assumed debt. General Electric Co.'s (GE) NBC Universal had been in talks with DreamWorks for the past nine months. Viacom was up 29 cents at $34.71, and GE rose 2 cents to $35.55.

AT&T Inc. (T) reached a tentative labor contract covering more than 11,000 of its workers, who were planning to strike if a deal had not been made by midnight Saturday. AT&T nonetheless lost 4 cents to $24.86.

Google (GOOG) rose $3.41 to $412.61 after Credit Suisse First Boston raised the company's price target by $75 to $475, citing expectations for accelerating revenue in the online advertising market.

Advancing issues led decliners by 17 to 16 on the New York Stock Exchange, where volume of 1.41 billion shares matched the number of shares that changed hands on Friday.

The Russell 2000 index of smaller companies rose 0.77, or 0.11 percent, to 689.54.

Overseas, Japan's Nikkei stock average jumped 2.17 percent. Britain's FTSE 100 slipped 0.29 percent, Germany's DAX index gained 0.36 percent, and France's CAC-40 was higher by 0.26 percent.