Abu Dhabi's $10 billion move to help neighboring Dubai avoid default and a deal by Citigroup Inc to pay back U.S. government funds helped U.S. stocks rise in early Monday trading.

Merger activity also lent support to the market with Exxon Mobil Corp saying it would buy natural gas supplier XTO Energy Inc in an all-stock transaction valued at about $31 billion, excluding debt.

Abu Dhabi's aid to Dubai included $4.1 billion for a bond maturing on Monday.

Dubai's get out-of-jail-free card being honored by Abu Dhabi is what's driving things this morning, said Peter Boockvar, equity strategist at Miller Tabak & Co in New York.

Citigroup laid out a plan to repay the money it owes the U.S. government, including raising money by issuing $17 billion of stock immediately, as the bank looks to end the executive pay restrictions that came with the funds.

Citi shares fell 5.6 percent to $3.73.

Citi's stock is trading down because of dilution, but (the deal) is good in terms of getting the government out from underneath them and having the banks prove they don't need government in the system, Boockvar said.

The Dow Jones industrial average <.DJI> edged up 15.80 points, or 0.15 percent, to 10,487.30. The Standard & Poor's 500 Index <.SPX> rose 3.59 points, or 0.32 percent, to 1,110.00. The Nasdaq Composite Index <.IXIC> gained 6.71 points, or 0.31 percent, to 2,197.02.

Shares of XTO soared 15.8 percent to $48.03 and Exxon Mobil fell 3.8 percent to $70.07. The First Trust ISE-Revere Natural Gas Index Fund , a natural-gas companies exchange-traded fund, rose 4.5 percent. XTO has underperformed that ETF by roughly 14 percent this year.

The White House said U.S. President Barack Obama will make a statement on the economy after a meeting with the heads of the top U.S. banks scheduled to start at 11:10 a.m. (1610 GMT).

(Editing by Padraic Cassidy)

Citigroup Dubai