Investors eye rising violence in Iraq

Updated at 1:08 p.m. ET

NEW YORK - Stocks were holding their gains as investors largely shrugged off heightening geopolitical tensions.

The Dow Jones industrial average was up 66 points, or 0.4 percent, to 16,434 in early afternoon trading. The Standard & Poor's 500 index and Nasdaq composite also rose slightly.

The U.S. launched airstrikes against Islamist militants in Iraq Friday as the Obama Administration vowed to stop Islamic State in Iraq and Syria (ISIS) fighters from capturing a northern city.

In Europe, Germany's DAX fell 0.2 percent while the FTSE 100 index of leading British shares sank 0.4 percent.

Oil prices rose earlier this year as ISIS took captured key cities, along with an oil facility, raising concerns that global oil markets could be disrupted. But prices fell in following weeks. The cost of benchmark Brent crude climbed more than $1 after the U.S. authorized airstrikes against ISIS, before falling slightly to less than $106 a barrel, according to Reuters.

Investors are weighing the escalating violence in Iraq, along with a simmering conflict in Ukraine, against data today showing that U.S. productivity rose at a 2.5 percent rate in the second quarter.

"In the coming months, productivity will be one of the more-watched economic statistics," Doug Handler, chief U.S. economist with IHS, said in a client note. "As employment levels continue to grow, it will be necessary for new hired workers to materially add to output in order for the economy's above-trend growth to continue. Greater productivity eventually will also spur additional labor demand, enabling a continuation of the recent spate of good job creation."