updated 12/13/2005 8:00:28 AM ET 2005-12-13T13:00:28

Stocks barely budged Monday, finishing mixed as interest rate worries and a legal setback for Merck & Co. countered momentum from a possible multibillion-dollar acquisition by ConocoPhillips.

Major Market Indices

Forecasts for midweek snowstorms in the Northeast catapulted energy prices on anticipation for increased demand , although OPEC said it will keep producing oil at current record levels before considering whether to scale back next year.

The stock market received an early boost from news of potential merger activity, while an upbeat analyst report on Google Inc. paced the tech sector. There was little economic news to guide the market Monday, but data on monthly retail sales, price inflation and manufacturing are scheduled for release later this week.

Instead, Wall Street is waiting for the Federal Reserve’s decision on interest rates Tuesday. While the Fed is expected to lift rates by another quarter percentage point to 4.25 percent, traders are hoping for indications the rate hikes will end soon. Recent economic strength has fed worries that the central bank might extend the increases.

“People are waiting to see what kind of change in policy language is going to accompany that statement,” said Russ Koesterich, senior portfolio manager at Barclays Global Investments. “The question is, if the Fed is approaching [a neutral stance], how will its policy change in 2006?”

Koesterich said he believes the Fed is near the end of its rate tightening, which should help stocks. But if there’s “evidence of an increase in core inflation, it’s reasonable to assume that the Fed is going to continue hiking rates,” he added.

The Dow Jones industrial average closed the session down 10.81 points, or 0.10 percent, while the broader Standard & Poor’s 500-stock index added 1.06 points, or 0.08 percent. The technology-rich Nasdaq composite index gained 4.22 points, or 0.19 percent.

The Energy Department said Monday crude oil is projected to remain well above $50 a barrel over the next 20 to 25 years because it does not expect OPEC to pump as much oil as previously planned. The report, however, also forecast a sharp price decline for natural gas.

In company news, Dow component Merck tumbled 72 cents to $28.41 following news that a judge declared a mistrial in the first federal Vioxx case. After 18 hours of deliberations, a Florida jury could not reach a unanimous verdict on whether Merck failed to warn about the risks of taking Vioxx.

ConocoPhillips is nearing a deal to acquire oil and gas producer Burlington for more than $30 billion, The Wall Street Journal said Monday. Together, the companies’ annual revenue would be more than $211 billion. ConocoPhillips fell $1.82 to $61.25, while Burlington surged $6.41 to $82.50.

The Journal also reported that apparel designer Tommy Hilfiger Corp., which put itself up for sale in August, could have three takeover offers by Friday. Hilfiger fell 15 cents to $17.75.

Movie studio Paramount Pictures, a unit of Viacom Inc., agreed to buy rival DreamWorks SKG Inc. in a $1.6 billion deal involving $775 million in cash and $825 million of assumed debt. General Electric Co.’s NBC Universal had been in talks with DreamWorks for most of this year. Viacom was up 24 cents at $34.65, and GE rose 2 cents to $35.55.

AT&T Inc. reached a tentative labor contract for more than 11,000 of its workers, who were planning to strike if a deal had not been made by midnight Saturday. AT&T, acquired by SBC Communications Inc. last month, fell 4 cents to $24.86.

Google rose $3.41 to $412.61 after Credit Suisse First Boston raised the company’s price target by $75 to $475, citing estimates for accelerating revenue in the online advertising market.

Overseas, Japan’s Nikkei average jumped 2.17 percent. In Europe, Britain’s FTSE 100 slipped 0.29 percent, Germany’s DAX index gained 0.36 percent and France’s CAC-40 added 0.26 percent.

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