US STOCKS-Markets higher on M&A, though Europe remains a drag

* Aon to buy Hewitt for $4.9 billion

* Concerns remain over Europe’s bank stress tests

* Alcoa to report Q2 results after market close

* Indexes up: Dow 0.1 pct, S&P 0.2 pct, Nasdaq 0.7 pct

* For up-to-the-minute market news see [STXNEWS/US]

(Updates to the open)

By Ryan Vlastelica

NEW YORK, July 12 (BestGrowthStock) – U.S. stocks (Read more about the stock market today. ) edged higher on
Monday on optimism over new merger deals and the upcoming
earnings season, though continued concerns about Europe’s
fiscal issues and financial sector limited gains.

Hewitt Associates Inc (HEW.N: ) surged 34 percent to $47.34
after Aon Corp (AON.N: ) agreed to buy the company for $4.9
billion in cash and stock, or $50 a share.

Separately, Playboy Enterprises Inc (PLA.N: ) advanced 35
percent to $5.33 after Hugh Hefner proposed a deal to take the
company private by buying all shares he does not currently own
for $5.50 in cash. [ID:nSGE66B0DN] and [ID:nN12177945]

“This is a positive sign, reflecting that corporations have
a slightly more positive outlook, as well as confidence int he
outlook of the economy going forward,” said Michael Sheldon,
chief market strategist at RDM Financial in Westport,
Connecticut.

But there was caution, following the S&P’s best week this
year and ahead of the “stress tests” of Europe’s banks. Over
the weekend, a German magazine reported that the test included
a haircut on German sovereign debt under certain conditions in
its worst scenario. [ID:nLDE66A061]

“There’s no shortage of things to worry about, and we need
better news and visibility from earnings and the stress test
results before we’ll be propelled too much higher,” Sheldon
said.

The Dow Jones industrial average (.DJI: ) was up 11.12
points, or 0.11 percent, at 10,209.15. The Standard & Poor’s
500 Index (.SPX: ) was up 2.14 points, or 0.20 percent, at
1,080.10.

The Nasdaq Composite Index (.IXIC: ) was up 16.29 points, or
0.74 percent, at 2,212.74. Semiconductor stocks helped lift the
index after Jefferies & Co issued a bullish call on the sector
and raised its price targets on many stocks in the group. The
Philadelphia semiconductor index (.SOXX: ) added 1.4 percent.

Alcoa fell 1.4 percent to $10.79 ahead of its results.
Analysts expect the first Dow component to report to swing to a
second-quarter profit (Read more your timing to make a profit.), though one that will be hit by falling
aluminum prices. [ID:nN09269488]

For the second quarter, analysts see earnings growth of 27
percent for companies in the S&P 500, according to Thomson
Reuters data, up from previous readings in the past three
quarters, which hovered around 22 percent. This would also be
higher than the 22.4 percent analysts were predicting at the
beginning of the year. [ID:nN08195712]

U.S.-listed shares of BP Plc (BP.L: ) (BP.N: ) rose 5.6 percent
to $35.96 a day after sources said the company was in talks
with Apache Corp (APA.N: ) and other companies over potential
asset sales. [ID:nLDE66B0GF]

Chinese data over the weekend showing the country’s copper
demand dropped sent Freeport McMoRan Copper & Gold Inc (FCX.N: )
down 2.8 percent to $64.12. [ID:nSGE66B007]

(Editing by Chizu Nomiyama)

US STOCKS-Markets higher on M&A, though Europe remains a drag