Dow up 109

NEW YORK - Stocks rose for a third straight session today as corporate mergers and bargain prices lured investors back to a market that is again inching toward record heights.

At the close of trading on Wall Street, the Dow Jones industrial average was up 109.54 at 10,909.38. Broader stock indicators were also higher. The Standard & Poor's 500 index rose 6.77 to 1,334.52, and the Nasdaq composite rose 45.87 to 2,524.21.

Advancers outnumbered decliners by a 7-to-5 margin on the New York Stock Exchange, with 1,718 up, 1,233 down and 578 unchanged.

NYSE volume totaled 657.44 million shares vs. 694.30 million on Friday. The NYSE composite index rose 2.42 to 636.94, and the American Stock Exchange composite index fell 2.83 to 778.15. The Russell 2000 index of smaller companies rose 4.32 to 446.95.

The 30-year bond was unchanged at 90 2/32, shedding an almost one-half point gain earlier. Its yield was 5.97 percent. Last week, yields touched 5.98 percent, the highest level since May 1998.

With today's gains, the Dow is less than 200 points, or about 1.8 percent, short of its May 13 record level. The Nasdaq, which had dipped as much as 10 percent below its April 26 record, is now just 4.8 percent short of the mark.

But the rally has not lifted all stocks, and analysts fret over the lack of a consistent leading sector. Volume remained light as traders already began looking ahead to Friday, when the government's producer price index is expected to offer signals about inflation and perhaps an indication of whether the Federal Reserve will raise interest rates to keep the economy from overheating.