* Medtronic to buy Covidien for $42.9 bln
* U.S. considering talks with Iran over Iraq
* Crude oil rises as Iraq violence spurs supply worry
* Dow flat; S&P 500 up 0.1 pct; Nasdaq up 0.2 pct
(Updates to close)
By Angela Moon
NEW YORK, June 16 U.S. stocks closed slightly
higher on Monday, supported by a flurry of merger news, but
turmoil in Iraq drove oil prices up and kept trading choppy.
Energy stocks were the day's winners, with the S&P energy
index up 0.5 percent. The S&P financial sector index
was the biggest decliner, down 0.4 percent.
The United States said it is considering air strikes and
cooperation with its arch-enemy, Iran, to help the Iraqi
government fend off an Islamist insurgency.
"Iraq is an excuse at this point for investors to sell at
these levels. As soon as there is some selling, buyers come in
almost immediately, and that is why the market is choppy like
today," said Peter Cardillo, chief market economist at Rockwell
Global Capital in New York.
"It's a further indication that this is not a market that
will just plunge on geopolitical issues."
On the merger front, 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. companies to take advantage of lower tax
rates abroad. Medtronic shares slid 1.1 percent to $60.03. In
contrast, Covidien's stock shot up 20.5 percent to $86.75; it
was the S&P 500's biggest percentage gainer.
The Dow Jones industrial average rose 5.27 points or
0.03 percent, to end at 16,781.01. The S&P 500 gained
1.62 points or 0.08 percent, to 1,937.78. The Nasdaq Composite
added 10.45 points or 0.24 percent, to 4,321.11.
Williams Companies jumped 18.7 percent to $56.02.
The stock was the S&P 500's second-biggest percentage gainer.
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.
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 fell 4.1 percent to
$42.30, while tw telecom's stock rose 7.3 percent to $38.99.
Fusion-io Inc shares soared 22.4 percent to $11.36
after SanDisk Corp said it will buy the company for
about $1.1 billion to boost its flash storage drive business.
SanDisk rose 3.6 percent to $102.00.
Crude oil futures rose in choppy trading as advances by
Sunni insurgents in Iraq fed concerns about a potential
disruption to oil exports from the second-largest OPEC producer.
Brent crude for August delivery rose 48 cents to
settle at $112.94 a barrel, off an intraday high of $113.28.
The CBOE Crude Oil ETF Volatility Index surged nearly
35 percent last week. It rose 0.3 percent on Monday to 19.52.
Economic data was positive. Manufacturing output rose in May
and factory activity in New York state accelerated sharply this
month, buoying hopes of a strong rebound in economic growth this
Volume was around 5.28 billion shares on U.S. exchanges,
slightly below last month's average of about 5.76 billion,
according to data from BATS Global Markets.
(Reporting by Angela Moon; Editing by Jan Paschal)