U.S. stocks stepped mildly higher climbed on Monday, with the Dow Jones Industrial Average extending its record rise, as Wall Street looked to earnings reports this week from retailers including Wal-Mart Stores and Macy's to get a read on consumer spending.
"Corporate earnings have been strong, and the view is that the Fed is on hold for the foreseeable future, so the focus turns to the holiday season, and the strength of the U.S. consumer," said Alan Skrainka, chief investment officer at Cornerstone Wealth Management. Results from retailers are likely to be "okay, and reflective of an economy where it needs to be," he added.
The S&P 500 gained 1.27 points, or less than 0.1 percent, to end at 1,771.88, after spending the session fluctuating on either side of its Oct. 29 record close of 1,771.95, with consumer discretionary the best performing and telecommunications hardest hit among its 10 major industry groups.
"I think the market will continue to rally, with some intraday corrections, but my target remains 1,800 on the S&P by year end," said Peter Cardillo, chief market economist at Rockwell Global Capital.
The Nasdaq Composite added less than 1 point to 3,919.79.
The CBOE Volatility Index, a gauge of investor uncertainty, declined to 12.53.
Trading volume, as expected, proved lower than usual on the Veteran's Day holiday, with nearly 538 million shares traded on the New York Stock Exchange. Composite volume topped 2.5 billion and advancers stayed just a step ahead of decliners.
The dollar edged lower against the currencies of major U.S. trading partners; crude-oil futures rose 54 cents, or 0.6 percent, to $95.14 a barrel and gold futures declined $3.50, or 0.3 percent, to $1,281.10 an ounce.
Transocean gained after the offshore-rig contractor said it came to an agreement with Carl Icahn to pay a dividend and cut the number of board seats. ViroPharma rallied after Ireland's Shire agreed to pay about $4.2 billion to acquire the specialty drug maker. Amazon rose after the online retailer said it was partnering with the U.S. Postal Service to deliver packages on Sunday. Best Buy climbed after UBS AG upgraded shares of the electronics retailer.
U.S. stocks climbed on Friday, with the Dow Jones Industrial Average closing at a record, after a positive jobs report had investors considering whether the U.S. economy was strong enough to handle a reduced stimulus program.
"The market is basically discounting the fact that possibilities have increased to 70-to-80 percent for tapering in December, and is looking at growth strengthening down the road," said Cardillo at Rockwell Global. "We're getting closer to them pulling back by $5 to $6 billion, I don't think it will be much more than that," added Cardillo, referring to his take of how much the Federal Reserve would begin cutting when it begins reducing its $85 billion a month in asset purchases.
Unlike Cardillo, who believed the Fed would start scaling back on its asset purchases before the end of the year ahead of Friday's jobs report, Cornerstrone Wealth Management's Skrainka said the solid report did not change his view that the Fed will not dial back on its stimulus until 2014.
That's especially because Janet Yellen, the president's nominee to replace Ben Bernanke as head of the Fed, "is not really running her first meeting until March," Skrainka said.
Investors will be closely watching the testimony of Fed Vice Chair Yellen on Thursday during her confirmation hearing before the Senate Banking Committee.
—By CNBC's Kate Gibson
Coming Up This Week:
MONDAY: Earnings from Hologic, Newscorp, Rackspace, Assured Guaranty, China Lodging Group, Northern Tier Energy
TUESDAY: Fed's Fisher speaks, Small Business Optimism index, Fed's Lockhart speaks; Earnings from Dean Foods, Dish Networks, DR Horton, NRG Energy, Vodafone, Echostar, MBIA, Ascent Capital, Babcock & Wilcox, Potbelly, Sina WuXi Pharma
WEDNESDAY: Mortgage applications; Fed's Pianalto speaks; 10-year Treasury note auction; Earnings from Macy's, Canadian Solar, Cisco Systems, NetApp, NetEase, Envision Healthcare, Kinross Gold, SeaWorld
THURSDAY: international trade; jobless claims; productivity and costs; Fed's Plosser speaks; natural gas inventories; oil inventories; 30-year bond auction; Earnings from Wal-Mart, Helmerich & Payne, Kohl's, Tyco, Viacom, Vivendi, Agilent, Applied Materials, Nordstrom
FRIDAY: Empire State manufacturing survey; import/export prices; industrial production; wholesale trade
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