Stocks squeezed out a small gain in thin, choppy trading Monday, erasing most of the session's earlier rally as traders were hesitant to fully jump in without any proper market conviction.
The Dow Jones Industrial Average gained 37 points, or 0.34 percent, to finish at 10,854.65, led by AT&T and Hewlett-Packard . The Dow was up more than 200 points during its session high.
Meanwhile, BofA led the gainers on the blue-chip index.
The S&P 500 notched up 0.29 points, or 0.03 percent, to close at 1,123.82. The Nasdaq added 3.54 points, or 0.15 percent, to end at 2,345.38.
The CBOE Volatility Index, widely considered the best gauge of fear in the market, traded near 42.
Among S&P sectors, materials and techs gained, while energy and financials lagged.
Last week, the major averages lost over 4 percentin choppy trading amid worries over a global recession in addition to the ongoing euro zone jitters.
"I don’t think this market has enough strength and volume to hold onto the gains we’ve seen so far," Jonathan Corpina, senior managing director of Meridian Equity Partners told CNBC. "[There's] not a lot of economic data this week—we all agree that the all the market movement’s going to come from headlines outside of the U.S. and everyone’s going to wait until Friday until we hear Mr. Bernanke speak."
At the end of the week, all eyes will be on Federal Reserve chairman Ben Bernanke as he makes his widely-anticipated speech at the Fed's annual Jackson Hole, Wyoming symposium. Investors will watch for any signs of a possible round of asset purchases (also known as quantitative easing) which will likely help bolster the stock market.
Bank of America dragged the banking sector lower. Wells Fargo cut their price target for the bank to $7-$9 from $10-$12, citing market volatility and recessionary fears. Rivals JPMorgan and Citigroup also fell.
Meanwhile, Goldman Sachs tumbled after news CEO Lloyd Blankfein hired high-profile Washington defense attorney Reid Weingarten, according to sources. Weingarten's previous clients include former Enron and WorldCom executives.
Hewlett-Packard led the Dow gainers after the IT giant revealed a new desktop computer, just days after it announced plans to spin off its PC business. Meanwhile, Auriga USA raised its rating on the firm to "buy" from "hold," while cut its price target to $32 from $43. (Read More: Fiorina Defends Compaq Merger as HP Plans PC Spin-Off)
Also on the tech front, Google gained after S&P Equity boosted its rating on the search-engine giant to "hold" from "sell."
About 45,000 Verizon employees that had been on strike are expected to return to work as the wireless company has reached an agreement for bargaining with unions.
Lowe's gained after the home-improvement retailer
Ford Motor and Toyota signed a deal to work together to develop hybrid systems for trucks and SUVs. Meanwhile, Deutsche Bank cut its price target on Ford to $15.5 from $16.50.
On the M&A front, 99-Cents Only Stores soared almost 10 percent after a report that Apollo Global Management was preparing to bid for the discount chain.
While there are no major economic news for the day, investors will await new home sales figures, durable goods orders data and GDP numbers throughout the week.
Meanwhile goldsurged to settle at $1,891 an ounce, another all-time high, as investors fled to the commodity as a safe-haven play amid fears of another U.S. recession and the euro zone's ongoing debt crisis.
Oil prices fellas Libyan rebels captured most of the country's capital, boosting hopes the OPEC nation's oil exports could resume soon.
European shares closed higher, boosted by integrated oil stocks amid hopes of an end to the conflict in Libya.
—Follow JeeYeon Park on Twitter: twitter.com/JeeYeonParkCNBC—
Coming Up This Week:
TUESDAY: New home sales, Richmond Fed Business Activity Survey, 2-Yr Note Auction; Earnings from Heinz
WEDNESDAY: Weekly mortgage apps, durable goods orders, oil inventories, 5-yr note auction; Earnings from Toll Brothers, Applied Materials, TiVo
THURSDAY: Weekly jobless claims, 7-yr note auction, Medtronic shareholders mtg, USDA food prices outlook; Earnings from Hormel, Pandora
FRIDAY: GDP, corproate profits, consumer sentiment, Bernanke speaks, short-sale bans expire; Earnings from Tiffany
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