The S&P 500 edged up to close at a record high on Monday as deal activity worth $100 billion offset concerns about overseas growth after Japan's economy slipped into recession.
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Shares of Baker Hughes, up 8.9 percent, and Allergan, up 5.3 percent, gave the S&P 500 its biggest boost after Halliburton said it would buy Baker Hughes and Allergan agreed to be bought by Actavis.
The Nasdaq closed lower, weighed down by Google, which fell 1.5 percent to $546.64, and Gilead, down 1.6 percent at $100.44.
"It shows the strength of the overall market that you could have this recession news out of Japan, and yet have the market inch upwards," said Eric Kuby, chief investment officer at North Star Investment Management Corp in Chicago.
But he said the outperformance of larger-cap names compared with smaller caps shows investors still are gravitating toward the more liquid investments.
The Dow Jones industrial average rose 13.01 points, or 0.07 percent, to 17,647.75, the S&P 500 gained 1.5 points, or 0.07 percent, to 2,041.32, a record closing high.
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Nasdaq Composite dropped 17.54 points, or 0.37 percent, to 4,671.00, while the small-cap Russell 2000 index ended down 0.8 percent.
Shares of LinkedIn dropped 4.5 percent to $223.28. Facebook's professional version of its social network will launch in the next few months that would compete with services such as LinkedIn, a person familiar with the matter told Reuters. Facebook shares were down 0.9 percent at $74.24.
Among the most active NYSE stocks were Halliburton, down 10.62 percent to $49.23, and U.S.-listed shares of Petrobras, down 6.23 percent to $9.33. Actavis rose 1.7 percent to $247.94.
On the Nasdaq, Apple, down 0.2 percent at $113.99; Yahoo, up 1.2 percent at $52.37; and Cisco Systems, up 0.6 percent at $26.47, were among the most actively traded.
About 5.7 billion shares changed hands on U.S. exchanges, below the 6.5 billion average this month, according to BATS Global Markets.
NYSE decliners outnumbered advancers 1,720 to 1,373, for a 1.25-to-1 ratio on the downside; on the Nasdaq, 1,780 issues fell and 920 advanced for a 1.93-to-1 ratio.
The S&P 500 posted 36 new 52-week highs and two new lows; the Nasdaq Composite recorded 76 new highs and 69 new lows.
(Reporting by Caroline Valetkevitch; Editing by Bernadette Baum and Nick Zieminski)