NEW YORK - Stocks edged higher Monday after a strong sales report from McDonald's offset concerns about the surprise resignation of Italy's prime minister. Investors also waited for developments in crucial U.S. budget talks.
The Dow Jones industrial average rose 14.75 points, to 13,169.88. The index traded within a range of just 56 points throughout the day. The Standard and Poor's 500 finished 0.48 point higher, at 1,418.55. The Nasdaq composite ended up 8.92 points, at 2,986.96.
McDonald's rose 93 cents, to $89.41. A key sales figure rose in November as U.S. customers bought more breakfast offerings and limited-time Cheddar Bacon Onion sandwiches.
Robert Pavlik, chief market strategist at Palm Beach, Fla.-based Banyan Partners, said the company's strength was encouraging. McDonald's, one of the 30 stocks in the Dow, was trading as high as $100 at the beginning of 2012.
The pickup in McDonald's sales, Pavlik said, gave investors something positive to focus on as Italy's sudden political turmoil sent a jolt through European markets.
Hewlett-Packard rose 36 cents, to $14.16, and also helped push the Dow higher. The company's stock has been battered the last two months following a weak earnings forecast and a public spat with the founder of Autonomy, a company it acquired for $10 billion last year.
Investors also were following developments in budget talks in Washington. Tax increases and federal spending cuts start Jan. 1 unless a deal is reached to reduce the budget deficit. Economists say the measures, if implemented, could help push the U.S. back into recession.
President Obama and House Speaker John Boehner met at the White House Sunday while rank-and-file Republicans stepped forward with what they called pragmatic ideas to break the stalemate. The Obama-Boehner meeting was the first between just the two leaders since Election Day.
"There's a pretty good belief that the 'fiscal cliff' can be avoided," said Craig Johnson, a technical market strategist at Piper Jaffray. "Anytime somebody is talking, it's a good thing."
Among other stocks making big moves Monday were:
Priceline.com, which fell $33.14, or 5 percent, to $625.96, after Deutsche Bank cut its recommendation to "hold" from "buy" and lowered its price target to $710 from $800.
Phillips 66, the refining and pipeline company, which gained $1.24, or 2.4 percent, to $53.58, after saying late Friday that it was raising its quarterly dividend to 31.25 cents per share from 25 cents and that it had approved the repurchase of another $1 billion in stock.
AIG, which fell 74 cents, or 2.3 percent, to $33.36, after reporting late Friday that it will take $1.3 billion in losses related to Hurricane Sandy, more than other major insurance companies have reported so far.