U.S. MARKET AVERAGES

Stocks advanced at opening, reflecting a decline in oil prices and stronger-than-expected earnings from Lowe's Cos which eased worries about corporate profits and consumer spending. A published report saying that Apple Computer is likely to acquire Walt Disney also contributed to the positive mood.

Crude-oil futures slipped Monday, following $2.37 surge Friday an explosion in Saudi Arabia. Front-month crude dipped 86 cents to $62.05 a barrel in electronic trade.

In overtake news, UK-based utility National Grid announced that it agreed to acquire KeySpan (KSE: chart) at the total value of $7.3 billion, or $42 per share in cash. The company said the merger creates the third-largest energy delivery utility in the U.S. National Grid said it will honor all labor agreements with the KeySpan unions, but employee reductions will be made through attrition and voluntary programs. The transaction is expected to close by early 2007.

On the analyst front, Citigroup upgraded SanDisk Corp. and M-Systems Flash Disk Pioneers to buy from hold.

The retail sector stood out as one of the best performers lifted by Lowe's (LOW: chart) which rose more than 4% on strong earnings and guidance. The sector gained about 1.4%. Utility stocks also showed strength owing to the National Grid's (NGG: chart) $7.3 billion deal to acquire KeySpan (KSE: chart).

Energy stocks posted modest losses as oil prices retreated after Friday's jump. The oil service sector was the worst performer in the group, down more than 1.5%. Housing stocks also posted modest weakness ahead of monthly new home sales data.

In midmorning trading, the Dow Jones industrial average rose 50.99, or 0.46%. The Standard & Poor's 500 index added 4.88, or 0.38%, and the Nasdaq composite index gained 14.13, or 0.62%.

Bonds edged higher, with the yield on the 10-year Treasury note falling to 4.56% from 4.58% late Friday.

MOVERS AND SHAKERS

Dana Corp. (DCN: chart), auto-parts maker, said it was in discussions with banks to resolve its financing difficulties and would come to a resolution within two weeks. On Friday the stock tumbled as it obtained a waiver from its lenders over its required credit rating on its accounts-receivable-securitization program. On Monday the stock surged 30%.

Wilshire Enterprises (WOC: chart) received an acquisition proposal from Mercury Real Estate Advisors LLC, an affiliate of real estate investment firm Mercury Partners LLC. The offer values Wilshire at $8.50 per share in cash, a slight premium to Wilshire's Friday closing price of $8.20. The company’s shares gained 3.8%.

Superior Essex (SPSX: chart) ,wire and copper maker, posted Q4 earnings drop of 16.7% to $3 million, or 18 cents a share, hurt by non-cash equity compensation and a bad debt provision for customer insolvencies. Excluding special items, earnings per share surged 79% to 25 cents a share and revenue rose 37% to $523 million. Company’s shares dropped 9.3%.

Vodafone group (VOD: chart), U.K. mobile operator, announced it will write off up to $49 billion of its assets, mostly relating to its German business. The stock fell 4%.

ECONOMIC NEWS

The Department of Commerce released its report on new home sales in the month of January on Monday, showing that sales fell compared to an upwardly revised reading for the month of December.

The report showed that new home sales fell 5 percent to a seasonally adjusted annual rate of 1.233 million units in January from a revised rate of 1.298 million units in December.

Economists had been expecting new home sales to come in at a 1.278 million unit rate compared to the 1.269 million unit rate originally reported for December.

The drop in new home sales reflected double-digit percentage declines in each of the four regions of the country. Sales in the Northeast showed a notable decline, falling 14.5 percent.

The report also showed that the seasonally adjusted estimate of new houses for sale at the end of January came in at 528,000, representing a supply of 5.2 months at the current sales rate.