MARKET SNAPSHOT: U.S. Stocks Edge Higher; S&P 500 Hits Record

By Anora Mahmudova, MarketWatch

NEW YORK (MarketWatch) -- The U.S. stock market edged higher on Monday, building on gains from the previous week that sent the S&P 500 and Dow Jones Industrial Average to record levels.

M&A deals between Tyson Foods Inc. and Hillshire Brands Co.; Analog Devices Inc. and Hittite Microwave Corp.; and Merck & Co. and Indenix Pharmaceuticals Inc. added to optimism on Wall Street.

The S&P 500 (SPX) was 2 points, 0.1%, higher at 1,951.45, hitting an intraday record shortly after the open.

The Dow Jones Industrial Average (DJI) rose 18 points, or 0.1%, to 16,941.30, also touching an intraday higher.

The Nasdaq Composite (RIXF) gained 5 points, or 0.1%, to 4,326.59.

Follow MarketWatch's live blog of today's stock-market action.

There was no economic data set for release Monday, however, two Federal Reserve officials were scheduled to speak. James Bullard, the president of the St. Louis Fed, speaking Monday morning, said there was evidence that inflation is now "moving higher." This is a significant shift in Bullard's outlook; only last month he said that inflation was stable and any uptick in price levels was just a forecast.

Boston Fed President Eric Rosengren, a nonvoting member of the policy committee, will speak at the central bank of Guatemala in Guatemala City at 1:30 p.m. Eastern Time.

In deal news, Tyson Foods (TSN) confirmed on Monday that it will buy Hillshire Brands Co.(HSH) for $8.55 billion in cash. Tyson has been battling rival Pilgrim's Pride Corp. (PPC) in a protracted war for Hillshire. Tyson shares fell 2.2%, while Hillshire was up 4.8%. Shares in Pilgrim's Pride fell 5.2%.

Chip maker Analog Devices Inc. (ADI)said Monday that it will buy Hittite Microwave Corp.(HITT) for $78 per share in cash. Hittite is a designer and manufacturer of integrated circuits, modules and instruments for radio frequency. Hittite shares soared 28%. Shares in Analog Devices rose 5.7%.

Merck & Co. Inc.(MRK) said it will buy Idenix Pharmaceuticals Inc.(IDIX) for $24.50 a share. The Merck buyout values Idenix at $3.85 billion, and Idenix shares more that tripled on the news.

On Monday Apple Inc. (AAPL) shares began trading for the first day following a 7-for-1 stock split. Experts say the seemingly cheaper stock price could attract a new generation of Apple-obsessed investors. On Monday, shares were marginally higher at $92.41.

Family Dollar Stores Inc. (FDO) rose 15% after billionaire investor Carl Icahn on Friday disclosed a 9.4% stake in the cut-price retailer late Friday. Rival retailer Dollar General Corp. (DG) rose 11%.

In overseas markets, European stocks were higher, while the Hong Kong Hang Seng Index stood out as a big gainer, taking a cue from Friday's U.S. rally. China posted a 7% rise in exports on the year Sunday, but a report out Friday showed a dramatic cooling from the country's property market, with land-sales plunging 45% from a year ago.

Gold for August delivery (GCQ4) posted gains, along with July crude oil (CLN4), while the dollar (DXY) pushed largely higher.

More must-reads from MarketWatch:

When picking stocks, ignore the headlines

A stock market forecast with a 14-year winning streak

3 reasons to consider buying emerging-markets stocks

Subscribe to WSJ: http://online.wsj.com?mod=djnwires