U.S. equities closed higher on Monday amid a plethora of corporate news, but gains were subdued by a rising dollar and falling oil prices.
The Dow Jones industrial average rose 129.33 points at session highs before closing about 75 points higher, with 3M and Boeing contributing the most gains. The S&P 500 rose 0.47 percent, with information technology rising 1.2 percent to lead advancers. The Nasdaq composite outperformed, posting its best day since September 21.
"As oil came off, the market lost some of its steam," said Daniel Deming, managing director at KKM Financial. "The market is getting perspective after the big merger news, with oil falling and the dollar further appreciating."
U.S. crude fell 0.65 percent to settle at $50.52 per barrel after Iran said it wanted to be exempt from an OPEC deal which would cut production. Crude prices have rallied recently on expectations that OPEC would strike a deal to cut worldwide output.
The U.S. dollar held 0.1 percent higher against a basket of currencies, with the euro near $1.087 and the yen around 104.2. The Chinese yuan, meanwhile, traded near six-year lows against the U.S. currency.
U.S. stocks have been holding in a narrow range recently, falling 1.1 percent over the past three months, as trading volume has remained unseasonably low. "I think there aren't that many players that want to get into this market unless we break out of this range," said KKM's Deming.
AT&T reached a deal to buy Time Warner on Saturday for more than $85 billion, or $107.50 per share. The combination brings Time Warner full circle back to the heady days of the first Dotcom bubble, when it created a merger of equals with AOL— which failed spectacularly in achieving its goals and resulted in an eventual breakup.
"We're in an expanding phase of risk in both financial markets and the broader economy," said Rob Lutts, chief investment officer at Cabot Wealth Management. "The merger activity is a step [in that transition.]"
"We're going to end 2016 and start 2017 on a strong note behind this," he said. " I would expect M&A activity ... to continue."