U.S. MARKET AVERAGES

U.S stocks have kept trading near the flat line with the Dow currently posting modest gains and the S&P 5000 sitting near the flat mark. Market was dragged down by falling oil prices which sent energy shares down. Another distinguished player was drug maker Johnson & Johnson which was sued by medical-device maker Guidant Corp. to force completion of a $25 billion merger of the two companies.

The gaming sector is currently up 1.4%, extending last week''s gains, ticking to a 7-week high. The leader in the group is Isle of Capri Casinos (ISLE), rising by more than 9%. The housing sector has been volatile through the morning session. The space has ticked to the upside, jumping above its morning trading range to reach an intraday high.

With a further decline in oil prices energy stocks remain the worst performers. The disk drive sector has weakened through most of the morning and now is posting a loss of over 1.1%.

Google (GOOG) has extended its 52-week high and is within $4 of the $400 mark. THQ Inc. (THQI) has jumped to the upside, breaking above a recent trading range and above resistance to reach a fresh peak.

Guidant (GDT) has further slipped on news that it has sued J&J (JNJ) to force the merger between the companies, setting a new 52-week low. Comcast (CMCSA) has also ticked to a fresh nadir, moving below a recent range.

Shares of oil majors like Exxon Mobil Corp. (XOM) and ConocoPhillips (COP) dropped as crude oil further declined on mild weather forecasts and eased fears over fuel supplies.

Natural gas producer El Paso Corp (EP) also fell on a larger third-quarter loss, hurt by a large charge and declining revenue.

Among rising shares, utility company TXU Corp. (TXU) said it would split its stock, buy back shares and sharply boost its dividend.

Dutch information and media company VNU said on Monday it is in talks with U.S. health-care data firm IMS Health that could terminate their $7 billion merger deal after a shareholder revolt.

MOVERS AND SHAKERS

The software giant Microsoft (MSFT) has appeared to be the main participant in the talks about the possible sale of a stake in America Online, a Time Warner (TWX) unit, according to The New York Times. Microsoft’s stock added 0.2% and Time Warner’s stock was up 0.6%.

Tivo (TIVO) and Yahoo (YHOO) plan to make an agreement that will connect Yahoo''s online service to TiVo''s set-top boxes, according to The New York Times. Tivo’s stock jumped 13% and Yahoo’s stock gained almost 1%.

The search engine Google (GOOG) is modifying some of its internet services for use on wireless devices. Starting today users of more than 100 types of cell phones can access Google''s map database, according to a Wall Street Journal report. The company’s shares were up about 4%.

INTERNATIONAL MARKET NEWS

Asian-Pacific benchmarks fell across the region on consolidation of last-week gains. The Nikkei declined 0.1% but still held above 14,000 on cautious trading. Among the other regional markets, Hong Kong’s Hang Seng was the biggest loser, down 1.5%, followed by Singapore’s Straits Times, falling by 0.6%, and South Korea’s Kospi, down 0.3%. China’s Shanghai Composite slightly advanced on a tentative agreement between China and U.S, while the Indian market rose 1.7%.

European markets closed in the green on deal talk, stronger dollar and falling oil prices. The German DAX 30 added 0.6%, London’s FTSE 100 advanced 0.7%, and the French CAC 40 added only 0.1% as gains were limited by oil major Total and insurance stocks.The euro fell to an 18-month low below $1.18.

OIL, METALS, CURRENCIES

Crude oil prices slid below $59 a barrel on unusually warm weather and easing worries about the winter season heating fuel demand. Light sweet crude December delivery fell to $58.60 a barrel. Heating oil lost 4 cents to $1.755 a gallon. Gasoline fell 7 cents to trade at $1.542. Natural gas dropped 2%, or nearly 24 cents to $11.18 per 1,000 cubic feet.

Gold traded higher in Europe. In London the precious metal closed at $456.85 per troy ounce, up from $456. In Zurich gold rose to $457.65 from $455.85. In Hong Kong gold fell $4 to close at $457.45. Silver closed at $7.46, down from $7.49.