U.S. stocks rose on Monday as Abu Dhabi's $10 billion in aid to help Dubai avoid default eased concerns, and a takeover deal by Exxon Mobil Corp raised optimism about mergers and acquisitions.

Citigroup Inc's plan to repay the U.S. government about $20 billion in bailout funds also helped buttress optimism.

Exxon Mobil said it would buy natural gas supplier XTO Energy Inc in an all-stock transaction valued at about $30 billion, excluding debt.

Abu Dhabi said on Monday it will provide Dubai $10 billion in bailout money, with $4.1 billion for payment on a maturing bond.

It's helping -- everyone kind of scratched their head, so we can't rely on a country or city-state to step up?' said Edward Hemmelgarn, chief investment officer of Shaker Investments in Cleveland.

People have just gone back to it, helped calm fears a little bit and then people think about something else.

The Dow Jones industrial average <.DJI> gained 33.03 points, or 0.32 percent, to 10,504.53. The Standard & Poor's 500 Index <.SPX> rose 7.13 points, or 0.64 percent, to 1,113.54. The Nasdaq Composite Index <.IXIC> climbed 19.03 points, or 0.87 percent, to 2,209.34.

Citigroup laid out a plan to repay the money it owes the U.S. government, including raising money by selling $17 billion of common stock immediately, as the bank looks to end the restrictions on executive pay that came with the funds.

Citi's stock slumped 6.6 percent to $3.69.

Shares of XTO climbed 15 percent to $47.72, while Exxon Mobil shed 4.4 percent to $69.64. The NYSE Arca Natural Gas index <.XNG> gained 4.6 percent.

The First Trust ISE-Revere Natural Gas Index Fund , an exchange-traded fund of natural gas companies' shares, rose 5.1 percent. XTO has underperformed that ETF by roughly 14 percent this year.

Sun Microsystems Inc shares advanced 10.5 percent to $9.23 on Nasdaq after European Union regulators signaled they could clear Oracle Corp's $7 billion takeover of Sun after Oracle promised measures to ease competition concerns. Oracle's stock rose 1.9 percent to $23.22.

Visa Inc shares rose 3.3 percent to $84 after ratings agency Standard & Poor's said late Friday the credit card company will replace telecommunications equipment maker Ciena Corp in the S&P 500 after the close of trading on December 18.

S&P also said Bristol-Myers Squibb split-off Mead Johnson Nutrition Co will replace bond insurer MBIA Inc on the same date. Mead Johnson shares rose 1.9 percent to $43.26.

(Editing by Kenneth Barry)