Among earnings, Lennar advanced after the homebuilder posted better-than-expected earnings as it sold more homes at higher prices. Other homebuilders were in positive territory, including Ryland, KBHome and Toll Brothers.
Carnival fell sharply after the cruise operator warned it could post a loss for the current quarter after reporting a 30-percent decline in its third-quarter earnings.
Facebook rallied to hit a record high after Hong Kong newspaper South China Morning Post reported that the social-networking giant, Twitter and other websites deemed sensitive and blocked by the Chinese government will be accessible in a planned free-trade zone (FTZ) in Shanghai. Earlier, Citi upgraded the Internet stock to "buy" from "neutral," citing the sustainability of recent increases in growth even amid initial uncertainty about an increasing shift to mobile use.
Apple climbed after at least four brokerages lifted their price targets on the tech giant. On Monday, Apple said that sales for its new iPhone had set a record, with consumers snapping up nine million smartphones within the first few days of its launch.
Applied Materials spiked to lead the S&P 500 gainers after the chipmaking equipment producer said it will acquire rival Tokyo Electron in an all-share deal, creating a company with a combined market value of $29 billion.
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On the economic front, home prices climbed 0.6 percent in July, according to the S&P/Case-Shiller composite index of 20 metropolitan areas. Compared to a year earlier, prices were up 12.4 percent, matching economists' expectations and marking the strongest rise since February 2006.
(Read more: Forget easing prices, new homes are up, up, up)
"The recovery in housing has been an important source of support for the U.S. economy, with residential investment adding to real GDP (gross domestic product) growth for eight consecutive quarters," said Barclays analysts Hamish Pepper and Cagdas Aksu in a note on Monday.
Meanwhile, the consumer confidence index declined slightly in September to 79.7 from a revised 81.8 in August, according to the Conference Board. Economists polled by Reuters expected a reading of 79.9.
Treasury prices gained after the government auctioned $33 billion in 2-year notes at a high yield of 0.348 percent. The bid-to-cover ratio, an indicator of demand, was 3.09.