Stocks edge higher
in volatile trading

NEW YORK » Wall Street managed a moderate gain yesterday in a volatile session that saw investors alternating between worries about interest rates and delight in a new wave of merger deals.

News of a successor to Michael Eisner at the Walt Disney Co. and a new chief executive officer at American International Group Inc. lifted stocks, as did planned acquisitions by Altria Group Inc. and IBM Corp.

However, the gains were muted by the inflation worries that sent stocks falling last week, as Federal Reserve board member Janet Yellen warned that rising interest rates could hurt borrowers. A rise in oil prices also unnerved investors, with a barrel of light crude settling at $54.95, up 52 cents, on the New York Mercantile Exchange.

The Dow Jones industrial average rose 30.15, or 0.28 percent, to 10,804.51.

Broader stock indicators also moved higher. The Standard & Poor's 500 index was up 6.75, or 0.56 percent, at 1,206.83, and the Nasdaq composite index gained 9.44, or 0.46 percent, to 2,051.04.

The bond market moved modestly higher, with the yield on the 10-year Treasury note falling to 4.51 percent from Friday's 4.55 percent. Gold prices fell as the U.S. dollar gained ground against most major currencies.

Investors were pleased after Disney announced over the weekend that company president Robert Iger would take over for Eisner Oct. 1, a year earlier than planned. Disney shares rose 43 cents to $28.02.

AIG lost 86 cents to $63.85 after The Wall Street Journal reported Maurice "Hank" Greenberg could be stepping down as CEO as early as this week. The paper reported that Martin Sullivan, vice chairman of the company, could take over for Greenberg, who has been criticized for the insurance company's mounting regulatory troubles.

Office Depot Inc. also announced a management change, naming AutoZone Inc. CEO Steve Odland as its new chairman and chief executive. Office Depot rose $1.56 to $20.75 on the news.

In acquisition news, Altria Group Inc. climbed 3 cents to $69.17 after it announced a $5.2 billion bid for Indonesian tobacco company PT HM Sampoerna in an attempt to bolster its international business.

Even with commodity prices higher and inflation concerns deepening, the spate of acquisitions is a harbinger of improvement in the overall economy, said Jack Ablin, chief investment officer at Harris Private Bank.

"The confluence of optimism and cash on the balance sheets has resulted in corporate acquisitions," Ablin said.