* U.S. considering talks with Iran over Iraq
* Medtronic to buy Covidien for $42.9 bln
* New York factory growth climbs in June
* Indexes up: Dow 0.08 pct, S&P 0.24 pct, Nasdaq 0.35 pct
(Updates to open, adds quote)
By Chuck Mikolajczak
NEW YORK, June 16 U.S. stocks were slightly
higher on Monday, as caution caused by turmoil in Iraq was
offset by a round of merger activity.
The United States is considering U.S. air strikes to help
the Iraqi government fend off an Islamist insurgency, as well as
possible discussions with neighboring Iran, U.S. Secretary of
State John Kerry said on Monday.
"If the market really didn't back off because of (Iraq),
people are concerned, they will keep watching it and unless it
really implodes the market is just going to churn," said Ken
Polcari, director of the NYSE floor division at O'Neil
Securities in New York.
Merger activity continued to support the market. Medical
device maker Medtronic Inc agreed to buy Dublin-based
Covidien Plc for $42.9 billion and shift its executive
headquarters to Ireland in the latest move by U.S. firms to
harvest lower tax rates abroad. Medtronic shares shed 2 percent
to $59.48 while Covidien jumped 23.7 percent to $89.06 as the
biggest boost to the S&P 500.
"The M&A absolutely keeps on coming. It's ripe for it with
rates so low, all this money on the balance sheet and companies
looking to grow their businesses," said Polcari.
The New York Fed's "Empire State" general business
conditions index rose to 19.28 this month, the strongest read
since June 2010, while U.S. manufacturing output rose solidly in
May as production increased across the board, bolstering
expectations that economic growth would rebound strongly this
In addition, the National Association of Home Builders/Wells
Fargo index of homebuilder confidence rose four points to 49 in
June, just a point below the level that indicates favorable
The Dow Jones industrial average rose 13.49 points or
0.08 percent, to 16,789.23, the S&P 500 gained 4.66
points or 0.24 percent, to 1,940.82 and the Nasdaq Composite
added 15.14 points or 0.35 percent, to 4,325.79.
Williams Companies climbed 21.2 percent to $57.19.
The pipeline operator said it agreed to acquire control of
Access Midstream Partners LP for $5.99 billion as the
first step toward merging it with its operations. Jefferies
upgraded Williams to a "buy" rating.
Level 3 Communications said it would buy Internet
services provider tw telecom Inc for $40.86 per share
in a cash and stock deal. Level 3 shares lost 5.5 percent to
$41.66 and tw telecom gained 7 percent to $38.90.
Fusion-it Inc surged 22.7 percent to $11.39 after
agreeing to be acquired by SanDisk for $1.1 billion.
(Editing by Bernadette Baum and Nick Zieminski)