European stocks edged higher in morning trade following a week-long sell-off, but rising concerns over Spain's ability to deal with its debt crisis weighed on the country's stocks, with the IBEX benchmark .IBEX down 1.4 percent at a two-week low.

Investors awaited pending home sales data for February, coming in the wake of a raft of lower-than-expected macro data released last week. Economists in a Reuters survey expect a 1.0 percent rise compared with a 2.0 percent increase in January.

Roche Holding AG (ROG.VX) on Monday extended its $5.7 billion cash bid for U.S. gene decoder Illumina (ILMN.O) for a second time as the Swiss drugmaker sticks to its tried and tested M&A strategy.

Yahoo Inc (YHOO.O) has appointed three new independent directors as it prepares for a proxy fight with activist hedge fund investor Daniel Loeb.

Disagreement emerged on Sunday over the re-listing of an electronic stock exchange that suffered a high-profile crash last week, a breakdown that forced it to unwind its initial public offering of shares.

DP World DPW.DI, the world's third-largest port operator, will repay a $3 billion loan six months ahead of schedule, it said on Monday, the latest Dubai entity to pay off debt early this year.

Brent crude edged below $125 on Monday as a possible resumption in crude production from South Sudan offset supply worries stemming from news of a sizeable drop in Iranian oil exports due to Western sanctions.

U.S. stocks rose in light volume on Friday, buoyed by rising energy and basic materials shares, as the S&P 500 kept showing resilience even as it posted its second negative week so far this year.

The Dow Jones industrial average .DJI gained 34.59 points, or 0.27 percent, to 13,080.73 at the close. The S&P 500 Index .INX rose 4.33 points, or 0.31 percent, to 1,397.11. The Nasdaq Composite .IXIC added 4.60 points, or 0.15 percent, to 3,067.92.

(Reporting by Blaise Robinson; Editing by Mark Potter)

• A Permanent Economic Emergency