The Dow Jones industrial average rose about 2 points. The small gain comes after the Dow posted its best week since July 2009.
Major indexes rose modestly in early trading after insurance broker Aon Corp. said it will buy human resources company Hewitt Associates for $4.9 billion in cash and stock. Acquisitions are often taken as a positive sign that companies are more confident about their future business and willing to spend cash being held in reserve.
Meanwhile, Playboy Enterprises Inc. founder Hugh Hefner is offering to buy the remaining outstanding stock of the company to take it private in a deal that values the media company at $185 million.
And beauty products seller Avon Products Inc. agreed to buy Silpada Designs for at least $650 million as it tries to expand its jewelry business.
The small gains come as investors prepare for the start of earnings season. Aluminum producer Alcoa starts the rush of quarterly results after the market closes.
Until last week, stocks had been sliding on signs that the economy is not growing nearly as fast as economists and investors had hoped. Earnings over the next few weeks will provide insight into whether sluggish retail sales, waning consumer confidence and high unemployment have actually hurt businesses' profits.
Investors will also want to see how upbeat executives are in their outlooks for the coming quarters. Increased optimism would likely give the market a boost. It could also be a sign that companies will increase their hiring in the coming months.
In morning trading, the Dow Jones industrial average rose 1.81, or less than 0.1 percent, to 10,201.36. The Standard & Poor's 500 index rose 0.58, or 0.1 percent, to 1,078.54, while the Nasdaq composite index rose 12.72, or 0.6 percent, to 2,209.17.
Declining stocks slightly outpaced those that rose on the New York Stock Exchange, where volume came to 67.83 million shares.
Despite the biggest weekly gains in a year, some investors are still unsure about a rebound in stocks. Trading volume remains light, which means many investors aren't feeling confident and are avoding any big moves.
And even with the surge, the Dow is still down 9 percent from its high of the year reached in late April.
This week should provide some direction about the health of the economy. Aside from earnings reports, traders will also get economic readings on retail sales, weekly jobless claims, manufacturing activity, consumer sentiment and inflation. The economic reports come during the second half of the week at the same time the pace of earnings reports picks up.
Hewitt shares jumped $11.69, or 33 percent, to $47.09. Aon shares fell $2.54, or 6.6 percent, to $35.80.
Playboy jumped $1.39, or 35.2 percent, to $5.33. Avon rose 16 cents to $28.43.
Meanwhile, bond prices traded in a tight range. The yield on the benchmark 10-year Treasury note, which moves opposite its price, fell to 3.05 percent from 3.06 percent late Friday.
The Russell 2000 index of smaller companies rose 0.09, or less than 0.1 percent, to 629.52.
Overseas, Britain's FTSE 100 rose 1.3 percent, Germany's DAX index gained 0.4 percent, and France's CAC-40 rose 0.9 percent. Japan's Nikkei stock average dipped 0.4 percent after the ruling party lost elections Sunday.
