U.S. stocks closed higher on Monday, with the S&P 500 at a record, as Wall Street weighed when the Federal Reserve would begin curbing its monetary stimulus and tracked budget negotiations on Capitol Hill.
Federal Reserve Bank of Richmond President Jeffrey Lacker on Monday said he expects a taper discussion at next week's Federal Open Market Committee meeting, while St. Louis Fed President James Bullard said positive trends in the labor market make cuts to the Fed's $85 billion in monthly bond purchases more likely. Speaking in Chicago, Federal Reserve Bank of Dallas President Richard Fisher reiterated his view that the Fed should start cutting back on its bond purchases "at the earliest opportunity."
The speeches came before Fed officials go into their "blackout" period before the two-day FOMC gathering that starts next Tuesday.
American Airlines Group's shares climbed after the U.S. Supreme Court declined to grant a stay that would have blocked the merger of American Airlines parent AMR and U.S. Airways, now the nation's largest airline. CEO Doug Parker told CNBC on Monday that it's difficult to say whether consolidation in the industry would take a breather.
Sysco shares rallied after the food-distribution company said it would pay about $3.5 billion and take on about $4.7 billion in debt to acquire competitor US Foods to form a company with about $65 billion in annual revenue.
Shares of McDonald's slid after the fast-food chain reported softer-than-expected global sales at established restaurants for last month, hit by a steep decline in comparable-store sales in the U.S.
The S&P 500 advanced 3.28 points, or 0.2 percent, to 1,808.37, clearing its prior all-time finish of 1,807.23 set on Nov. 27, with technology and materials the best performing and utilities and consumer discretionary faring the worst of its 10 major industry groups.
The Nasdaq ended at a 13-year high, rising 6.23 points, or 0.2 percent, to 4,068.75.
Advancers ran just ahead of decliners on the New York Stock Exchange, where nearly 696 million shares traded. Composite volume hit 3.1 billion;.
The U.S. dollar edged held steady against the currencies of major U.S. trading partners and the yield on the 10-year Treasury note, used in figuring mortgage rates and other consumer loans, fell 1 basis point to 2.85 percent.
Wall Street was also tracking budget discussions in Washington, with negotiators close to an agreement on cutting automatic spending reductions and halt a three-year period of unsuccessful fiscal discussions. Lawmakers face a Friday deadline to reach a deal to help curtail $100 billion to $200 billion in automatic reductions for a year or so.
"The market may focus on Washington this week, as Congress is under pressure to announce a compromise on a two-year federal budget ahead of going on their year-end holiday vacation break this weekend," Fred Dickson, chief investment strategist, at Davidson & Co. wrote in emailed commentary.
Data released Sunday showed Chinese exports jumping 12.7 percent last month from the year-earlier period, with imports into the country rising 5.3 percent. A Monday report had consumer prices in China climbing 3 percent.
On Friday, stocks rallied on a strong November jobs report that had the jobless rate falling to a five-year low and another report that had consumer confidence rising to a five-month high.
—By CNBC's Kate Gibson
Coming Up This Week:
Monday: Quarterly results are expected from Constellation Brands.
Tuesday: NFIB small business survey 7:30 a.m. Eastern; wholesale trade at 10 a.m. Eastern; JOLTS survey at 10 a.m. Eastern; $30 billion 3-year Treasury note auction at 1 p.m. Eastern. Earnings expected ahead of the market open include Autozone and Leidos Holdings. H&R Block is schedule to release earnings after the close.
Wednesday: mortgage applications at 7 a.m. Eastern; $21 billion 10-year Treasury note auction at 1 p.m. Eastern. Earnings expected ahead of the market open include Joy Global. Costco Wholesale is also expected to report results.
Thursday: initial claims at 8:30 a.m. Eastern; retail sales at 8:30 a.m. Eastern; import prices at 8:30 a.m. Eastern; business inventories at 10 a.m. Eastern. $13 billion 30-year Treasury bond auction at 1 p.m. Eastern. Adobe Systems is expected to report quarterly results after the market close.
Friday: producer price index at 8:30 a.m. Eastern.
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