After heavy rain washed out Friday's action, the field completed the second round Saturday. Sunday will see the 60 players that made the cut play the final 36 holes.
Jose Maria Canizares posted his second straight round of 3-under 68. He stands alone in third place at 6-under-par 136. D.A. Weibring, Jay Haas, Tom Kite, Fuzzy Zoeller and Bob Gilder are one stroke further back at minus-5.
Of the top eight players on the leaderboard, Stadler, Zoeller and Kite have won major championships in either their PGA or Champions Tour careers.
Jacobsen, who withdrew from his last few events due to recurring hip pain from recent surgery, opened with a birdie on the 11th after dropping a sand-wedge within three feet of the cup. The Champions Tour rookie then chipped in for birdie at the 13th from 40 feet.
The seven-time winner on the PGA Tour was unable to get up-and-down for par at the par-3 16th at Bellerive Country Club and slid back to 7 under. Jacobsen hit an 8-iron within 3 feet of the cup at the 18th to set up his third birdie of the day.
Jacobsen nearly holed his tee shot at the par-3 third, but settled for a par after missing a 4-foot birdie try. He then three-putted for bogey at the par-5 fourth and stumbled to another bogey at the next.
'It was getting hot out there,' Jacobsen said. 'I missed a short putt on three, three-putted the fourth and bogeyed the fifth. Any time you come back with a birdie on six, that's going to settle you down.'
The 50-year-old gathered himself and hit a 5-iron to 15 feet at the sixth. Jacobsen sank that birdie try to get back to minus-7. He parred his final three holes to remain there.
'I've been putting fabulously well,' said Jacobsen. 'I missed a couple of putts. I made a couple of mistakes, but you're going to do that. This is a very difficult course.'
The battle for Jacobsen on Sunday will be his ailing hip. This will be his first attempt at playing 36 holes since his surgery.
'I think it would be beneficial,' said Jacobsen of a potential long layoff between his third and final rounds. 'I'd have a chance to sit down, stretch out and then go do it again. I just have to stretch through the pain and stiffness. It's going to be interesting tomorrow.'
Stadler was very steady through his opening nine holes. After parring the first five holes, he dropped a stroke at the par-3 sixth. He went on to par his next four holes.
The Walrus, as Stadler is known, collected his first birdie at the par-4 11th. He came right back to birdie the par-3 13th for the second time in the tournament.
Stadler joined Jacobsen in the lead with a 10-foot birdie putt at the 15th. He parred his next two holes and gave himself a shot at the lead at the last. Stadler dropped his second shot within 15 feet of the cup at the 18th, but missed the birdie try that would have given him the out-right lead.
'I hit a decent second shot on seven,' Stadler said. 'That was is the only good iron I hit. I hit a pretty good second shot to 10 and got fortunate with a shot out of the rough on 11. After that I made a lot of good swings.'
Stadler couldn't recall the last time he played 36 holes in one day of tournament action.
'I think I had 28 holes on Monday at the Senior PGA in Louisville a couple months ago, which was probably about the same weather as this, hot and humid,' Stadler said. 'Not that hot, but humid. I can't remember the last time I played 36 actually. This kind of weather you hang in there and try to pace yourself.'
Hale Irwin, a two-time winner of this event, and Gil Morgan share ninth place at 4-under-par 138. Morris Hatalsky, who tied for fifth at this event two years ago, is one stroke further back at minus-3.
Bruce Fleisher, the 2001 champion, Walter Hall, Dan Halldorson, Ford Senior Players Championship winner Mark James, Doug Johnson, Doug Tewell, Andy Bean and 1996 U.S. Senior Open winner Dave Stockton are tied at 2-under-par 140.
Bruce Lietzke, the defending champion, posted a 2-under 69 to move to 2-over-par 144.
The cut line fell at 4-over-par 146 with such players as Bobby Wadkins (147), Ben Crenshaw (148), Gary Player (148) and Ed Dougherty (149) missing the cut.