But a sharp drop in crude oil prices pushed shares of energy companies, including Exxon Mobil Corp. (XOM) lower, sending the Dow Jones industrial average into negative territory and the broader market to about even.
With benchmark U.S. Treasury bond yields near four-month highs, concerns that economic growth may prove much stronger than expected undermined hopes that the Federal Reserve could have room to cut interest rates any time soon.
"As long as M&A continues, that's going to keep bolstering the market," said Stephen Massocca, co-chief executive of San Francisco-based investment bank Pacific Growth Equities. "But a rain cloud in the sky is probably the fact that yields on the 10-year Treasuries kicked up to 4.87 percent."
The 10-year note's yield climbed to 4.89 percent by early Tuesday afternoon as its price, which moves in the opposite direction, fell 5/32.
"The time you hit 5 percent or higher, that's going to be an issue for the market," Massocca said. "The greater problem is the economy overheating. The economy is not weak."
The Dow Jones industrial average was down 5.20 points, or 0.04 percent, at 13,502.08. The Standard & Poor's 500 Index was up 0.96 of a point, or 0.06 percent, at 1,516.69. The Nasdaq Composite Indexwas up 10.14 points, or 0.40 percent, at 2,567.33.
Shares of Avaya jumped 16 percent to $15.85 on the New York Stock Exchange after the Wall Street Journal reported that the telecommunications equipment maker was in talks with private equity and strategic bidders about selling all or part of the company.
On Nasdaq, shares of Qualcomm Inc. (QCOM) led the gainers, up 2.4 percent at $44.40, after a trade authority extended the deadline for a decision on what remedies, if any, to impose in a patent infringement complaint brought by Broadcom Corp. (BRCM). Broadcom shares were up 0.2 percent at $30.58, reversing an earlier decline.
Shares of CDW Corp. (CDWC) shot up 9.5 percent to $82.70 on the Nasdaq following a Wall Street Journal report that the computer technology retailer may be a takeover target of private equity firms.
Shares of International Business Machines Corp. rose 0.7 percent to $105.91 after financial newspaper Barron's reported that the stock could easily top $120, citing the company's forecast for higher profits due to software sales, stock buybacks, and growth in emerging markets.
But shares of Exxon Mobil were the biggest drag on both the Dow and the S&P 500 as the stock fell in sync with oil prices, which slid as worries about threats of disruption of production in Nigeria eased and more U.S. refinery units resumed business.
Exxon shares fell 1 percent to $82.68 on the NYSE, while U.S. crude for July delivery dropped $1.75 to $63.45 a barrel on the New York Mercantile Exchange.
U.S. financial markets were closed Monday for Memorial Day.