Wall Street recovered earlier losses on Monday as gains in healthcare stocks offset a slide in the energy sector.
Pfizer's $14 billion acquisition of cancer drug maker Medivation propped up biotech stocks. Medivation's shares jumped nearly 20 percent, giving the biggest boost to the Nasdaq.
With the earnings season coming to an end, investor focus will shift to Federal Reserve Chair Janet Yellen's speech on Friday at the annual central bankers' meeting in Jackson Hole, Wyoming to see whether the Fed is keen on raising interest rates in the coming months.
The case for an imminent rate hike was strengthened by Fed Vice Chairman Stanley Fischer's comments that the U.S. economy was close to hitting job and inflation targets.
Traders have priced in an 18 percent chance of a rate hike for September, up from 12 percent odds seen on Friday. That measure rose to 40.6 percent for December from 39.1 percent, according to the CME Group's FedWatch tool.
"There is some hesitation in the markets ahead of Yellen's speech but the Pfizer deal is bolstering some confidence in U.S. equities," said Andre Bakhos, managing director at Janlyn Capital LLC in Bernardsville, New Jersey.
Oil prices fell nearly 3 percent, retreating from last week's two-month highs, on worries about burgeoning Chinese fuel exports, more Iraqi and Nigerian crude shipments and a rising U.S. oil rig count.
At 12:31 p.m. ET (1631 GMT), the Dow Jones industrial average was up 4.25 points, or 0.02 percent, at 18,556.82.
The S&P 500 was up 0.35 points, or 0.02 percent, at 2,184.22.
The Nasdaq Composite was up 3.44 points, or 0.07 percent, at 5,241.82.
Eight of the 10 major S&P 500 indexes were lower, with the energy index falling the most by 1 percent, followed by a 0.45 percent decline in materials.
The healthcare index rose 0.55 percent.
The CBOE volatility index, commonly called Wall Street's "fear gauge", rose the most since June 24, the day of the Brexit vote result.
Apple was off 0.9 percent and weighed the most on all three major indexes.
Chipmaker Intersil jumped 19.5 percent $18.69 after a source told Reuters that Japan's Renesas was in the final stages of negotiations to acquire the company for about $2.99 billion.
Declining issues outnumbered advancing ones on the NYSE by 1,617 to 1,259. On the Nasdaq, 1,388 issues fell and 1,336 advanced.
The S&P 500 index showed 11 new 52-week highs and no new lows, while the Nasdaq recorded 87 new highs and 16 new lows. (Reporting by Yashaswini Swamynathan in Bengaluru; Editing by Don Sebastian)