Stocks continued to trade narrowly mixed ahead of the close amid thin trading and a lack of economic news as stocks struggled to move beyond recent highs.
The Dow Jones Industrial Average fell more than 10 points as the market struggled to hold on to December gains.
3M , Alcoa and JPMorgan advanced, while American Express and Boeing fell.
The S&P 500 was up, although off its 52-week high of 1,250.20, while the Nasdaq also gained. The CBOE Volatility Index, widely considered the best gauge of fear in the market, fell to just above 16.
Through last Friday,the Dow had gained nearly 4.5 percent for the month, and more than 10 percent for the year-to-date, while the S&P 500 Index was trading at a 52-week-high, up more than 5 percent for the month and 11.55 percent for the year-to-date. The Nasdaq was up nearly 6 percent for December, and 16.5 percent for the year-to-date.
Among key S&P 500 sectors, energy, consumer discretionary and telecom rose.
The dollar gained slightly against a basket of foreign currencies as the euro struggled against the Swiss Franc amid continuing euro zone debt concerns. Gold remained a strong safe-havenalternative Monday, gaining nearly $7 to close at $1,385.50 an ounce, amid tensions in Korea and concerns about Europe.
Monday's market weakness likely reflected a bit of nervousness heading into the new year, as investors waited for important economic news coming out later this week, including Gross Domestic Product and existing homes sales on Wednesday, Doug Roberts, chief investment strategist at ChannelCapitalResearch.com told CNBC.com.
But Roberts expects stocks will continue to rise as investors seek to put money that had been on the sidelines or in bonds to work, and as the Federal Reserve continues to fuel the economy through bond purchases. The caveat, he said, is an unexpected jolt from outside the U.S., say, from a European bank, or actions by China, could rattle domestic markets.
"I'm bullish, but it’ll be volatile, and we’re still very vulnerable," Roberts said.
Meanwhile, TrimTabs Investment Research remains "cautiously bullish," saying stock prices will move higher over the intermediate term. The caution stems from two factors: companies and corporate insiders have been net sellers of shares; and investor sentiment "has become exuberant, which suggests the market's gains could be modest," TrimTabs said.
Corporate insiders sold $10.6 billion in November, and $10.7 billion so far in December, levels that have not been seen since the stock market highs of late 2007, the research firm said.
Energy shares were up slightly as oil prices closed above $88 a barrel. Meanwhile, Bank of America Merrill Lynch forecasted oil could rise to $118 to $120 a barrel.
Conoco Philips , Marathon Oil and Valero all gained.
Chesapeake Energy advanced more than 5 percent after news Carl Icahn has built a 5.8 percent stake in the natural gas producer. In a Securities and Exchange Commission filing, Icahn said the shares were undervalued.
Coal mining stocks, meanwhile, rose after FBR Capital Markets raised Consol Energy , Cloud Peak Energy and Patriot Coal to "outperform" from "market perform," citing rising demand. FBR also raised Halliburton to "outperform" from "market perform," saying it expected the oil services firm to gain market share.
In corporate news, AT&T shares fell slightly after news the telecom giant plans to buy acquire wireless spectrum licenses from Qualcomm for $1.9 billion to boost its high-speed, next-generation "4G" network. Qualcomm's shares also gained.
Raytheon plans to acquired Applied Signal Technology , a move that will allow the defense contractor to expand its intelligence products. Applied Signal makes communication interception gear.
Sara Lee slipped after news over the weekend that the food maker has is been discussing a sale with Brazilian meat producer JBS, but the companies haven't been able to reach an agreement.
American Express sank more than 4 percent after Stifel Nicolaus downgraded the financial services company to "hold" from "buy," citing the effects of proposed limits to debit-card interchange fees. But KBW raised its price target on AmEx to $60 a share from $56 (Watch FastMoney for Why Stifel Downgraded AmEx).
But KBW cut Visa's price target to $98 a share from $100, in the wake of the debit-card proposal.
Meanwhile, KBW raised its price target for Capital One Financial to $47 a share from $45.
Boeing sank despite news the aircraft maker plans to boost production of 777 airplanes as investors focused on a report that delivery of the 787 Dreamliner be delayed at least six months more.
Medtronic shares rose after news CEO William Hawkins will retire in April or until a successor is found.
In tech news, NetApp shares jumped after news Stifel Nicolaus raised the data management company's shares to "buy" from "hold."
And Research in Motion slipped despite Nomura raising the Blackberry maker's price target to $65 from $60 a share, and Raymond James raising its price target to $77 from $75 a share.
Fiserv shares slid after Baird cut its rating on the elecronic commerce systems company to "neutral" from "outmarket," citing
Sony said it expected to miss its sales target of 25 million LCD TVs for the year to March 2011 Sunday.