Stocks Hold On To Gains

U.S. Market
After wavering for much of the session, stocks ended in the black, recording new record high closings for the Dow (up 0.1% to 16,943.10) and the S&P 500 (up 0.1% to 1,951.27). The Nasdaq gained 0.3% to close at 4,336.24.

Of note were comments by Federal Reserve Bank of Boston President Eric Rosengren, who said the central bank may need to implement a second phase of tapering as it unwinds its bond-buying stimulus program. This would allow the Fed to reduce the size of its balance sheet. Also, James Bullard, president of the St. Louis Fed, said that inflation is now "moving higher." The comment came a month after Bullard said inflation was stable and would appear to mark a major shift in his outlook.

The U.S. job market continues to grow, according to a compilation of indicators released Monday by The Conference Board. The board said its May employment trends index increased to 118.58 from a revised 117.32 the previous month. Seven of the index's eight labor-market indicators were positive in May, with the biggest gains in industrial production and jobless claims.

Stocks on the Move
Following its seven-for-one stock split, shares of Apple (AAPL) gained 1.6%. Split-adjusted trading volume in the stock was slightly below average on the day.

Shares of Hillshire Brands (HSH) gained 5.3% on news that Tyson Foods (TSN) has agreed to buy the company for $63 a share in cash, as Pilgrim's Pride (PPC) withdrew its bid for the company. The deal is valued at $8.55 billion, including outstanding debt. Tyson Foods lost 6.5% while Pilgrim's Pride lost 6.7%.

Shares in Family Dollar Stores (FDO) jumped 13.4% on news that activist investor Carl Icahn has taken a 9.4% stake in the company. Shares in competitor Dollar General (DG) gained 7.3%.

Drugmaker Merck (MRK) has agreed to buy Idenix Pharmaceuticals (IDEX) for $3.85 billion, or $24.50 a share, in order to expand its hepatitis C treatment lineup. The price is triple Idenix's Friday closing price. Merck shares ended the day up 0.2%.