Stocks edged higher on Monday, helped by utilities after a news report that China's sovereign wealth fund is eyeing a stake in U.S. power company AES Corp
However, concerns about trade friction between the United States and China limited gains after Washington imposed special duties on Chinese tire imports.
Shares of AES rose 4.2 percent to $14.75, while the S&P utilities index <.GSPU> gained 1.4 percent after the Wall Street Journal's report on the China-AES talks.
M&A activity is definitely starting to heat up. (The AES news) sparked interest in the whole utility sector, said Owen Fitzpatrick, head of U.S. Equity Group at Deutsche Bank Private Wealth Management
Shares of U.S. tire makers also rose, with Goodyear Tire & Rubber Co
But analysts said the trade decision by President Barack Obama could open the door to a host of trade complaints against Chinese products, creating tensions as Western nations seek support from the world's third-largest economy at G20 meetings later this month.
The Dow Jones industrial average <.DJI> was up 9.75 points, or 0.10 percent, at 9,615.16. The Standard & Poor's 500 Index <.SPX> was up 4.25 points, or 0.41 percent, at 1,046.98. The Nasdaq Composite Index <.IXIC> was up 7.22 points, or 0.35 percent, at 2,088.12
In other corporate deal news, Sprint Nextel Corp
China's commerce ministry said Sunday it launched an anti-dumping investigation into imports of U.S. chicken products and automotive exporters.
Although on the surface it could lead to something serious, I think both sides, and certainly China, realize that it not in their best interest to really escalate this, said Bruce Zaro, chief technical strategist at Delta Global Advisors in Boston.
Stocks showed little reaction when Obama spoke earlier in New York and called on financial firms not to fight regulatory reform, He also urged Congress to pass his legislative proposals on the subject, speaking one year after Lehman Brothers' collapse sent world markets into a tailspin.
(Reporting by Caroline Valetkevitch; Editing by Kenneth Barry)