Stocks Inch Higher as McDonald's, HP and Cisco Advance

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In Europe, Italy's 10-year bond yield spiked by more than 0.2 percentage points to 4.79% after technocrat Prime Minister Mario Monti said over the weekend he intends to resign once the country's 2013 budget passes into law, following the loss of support from former Prime Minister Silvio Berlusconi's PDL party. Monti's resignation sparked worries over efforts to repair the country's debt crisis.

Berlusconi announced that he will run for office again.

Monti had stepped in to replace Berlusconi after the Italian 10-year bond yield jumped to a record 7.48% in November 2011.

"The eurozone's political scene was thrown into uncertainty ... Monti's succession was always going to be a potential stumbling block for the eurozone's crisis resolution, and the credibility of Italy's reforms will undoubtedly face closer scrutiny in the coming months, and yields will react accordingly," said Geoffrey Yu, a currency strategist at UBS.

Gold for February delivery rose $8.90 to settle at $1,714.40 an ounce at the Comex division of the New York Mercantile Exchange, while January crude oil contracts dipped 37 cents to $85.56 a barrel.

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The benchmark 10-year Treasury gained 2/32 to dilute the yield to 1.622%. The dollar was down 0.12%, according to the U.S. dollar index .

In corporate news, American International Group (AIG) said it plans to sell up to 90% of International Lease Finance Corp. (ILFC) to a Chinese consortium led by Weng Xianding, chairman of New China Trust Co., for about $5.28 billion. AIG shares were off 2.3%.

Ingersoll-Rand (IR) announced Monday its plan to spin off its commercial and residential security businesses. The company also announced a new share-repurchase program of up to $2 billion of common stock and a dividend hike of about 31%. Shares were off 1.9%.

Shares of Nokia (NOK) fell 4.2% on Monday after Oppenheimer urged investors to approach the handset maker with caution.

Shares of Intermec(IN) soared 23% after the wired and wireless automated identification and data collection services company agreed to be acquired by Honeywell (HON) for $10 a share in an all-cash transaction valued at about $600 million. Honeywell shares were down 0.18%.

Diamond Foods (DMND) shares tumbled 10% after the company swung to a fiscal fourth-quarter loss as it was hit by charges tied to probes on its accounting scandal and the shuttering of a factory.

Marathon Petroleum ( MPC ) shares tacked on 2.2% after being named to Barron's list of 10 favorite stocks for 2013.

-- Written by Andrea Tse and Joe Deaux in New York.

>To contact the writer of this article, click here: Andrea Tse .