Stocks trimmed gains and turned mixed Monday as retailers, and technology stocks slipped amid a market generally gaining support from M&A activity as well as the lack of an expected interest rate hike in China.
The Dow Jones Industrial Average rose more than 25 points, after rising more than 60 earlier in the session, and after ending last weekon a positive note.
Caterpillar, Chevron and Merck gained, while Hewlett-Packard and Bank of America fell.
The S&P 500 rose slightly, while the Nasdaq fell. Most key S&P 500 sectors gained led by energy, materials and utilities. The CBOE Volatility Index, widely considered the best gauge of fear in the market, fell to below 17, its lowest levels since April.
VIX futures were also trading at low levels, with the VIX for December delivery trading only about a point higher the VIX itself, Nate Peterson, senior derivatives analyst at Charles Schwab told CNBC.com.
"I think the belief is, closing out the year, (traders) don’t expect a lot of volatility or a pullback to the market," Peterson said.
Congress is set to vote on a tax package compromise put forward by President Obama that would extend Bush-era tax cuts for two years. The extension is expected to pass even though it proved highly controversial with Democrats.
Treasurys slumped in anticipation the tax plan would stimulate the economy and add to inflation. The price of the 10-year Treasury note fell, pushing the yield to 3.35 percent. Earlier, the 10-year yield hit a six-month high.
The dollar , meanwhile, fell against a basket of currencies as the euro rose more than 1 percent. Gold gained nearly 1 percent to settle at $1,397 an ounce.
A flurry of deals and acquisitions helped boost the market.
Dell agreed to buy Compellent Technologies for about $960 million in cash, as it pushes into cloud computing.
GE announced plans to buy Wellstream , a British oilfield services company, for about $1.3 billion.GE is the parent of CNBC.
Thermo Fisher Scientific rose after the scientific instruments maker said it will acquire Dionex for $2.1 billion to broaden its lab-equipment offerings.
Energy stocks advanced as oil rose to more than $88 a barrelon news China's industrial output topped expectations in November, and after the OPEC agreed to keep its production targets unchanged.Cabot Oil & Gas
advanced more than 5 percent after news the independent oil and gas company received an air quality permit for a compressor station to begin construction.Chevron
Materials were also the day's gainers with Freeport McMoran , ArcelorMittal and Posco climbing more than 3 percent each.