Stocks squeezed out small gains Monday, adding to the previous week's robust rally, as investors turned their focus to fourth-quarter earnings season.
The Dow Jones Industrial Average tacked on 32.77 points, or 0.27 percent, to close at 12,392.69, led by Alcoa and BofA .
The S&P 500 edged up 2.89 points, or 0.23 percent, to end at 1,280.70. The Nasdaq squeezed out a small gain of 2.34 points, or 0.09 percent, to finish at 2,676.56.
The CBOE Volatility Index, widely considered the best gauge of fear in the market, ended near 21.
Among key S&P sectors, industrials gained, while techs dipped.
“Clarity is going to help us,” said Marc Pado, U.S. strategist at Cantor Fitzgerald. “Market wants to see as much as they can see what the risk is for financials.”
In Europe, Sarkozy and Merkel said they want EU states to complete their negotiations on a planned new treaty in the coming days so it could be signed on March 1.
Meanwhile, Germany sold 3.9 billion euros ($4.9 billion) in six-month T-Bills with the yield negative for the first time in a money market auction. Investors will be closely watching Italy and Spain's bond auctions later this week.
“We’re up against resistance and the market is waiting for earnings,” said Pado. “What would drive us through [the resistance area] is better than expected earnings...[but] there’s a lot of chatter that they aren’t going to measure up.”
Aluminum producer Alcoa is scheduled to report after the bell, marking the unofficial start to the fourth-quarter earnings season. Banking giant JPMorgan is slated to post on Friday.
Fourth-quarter earnings are expected to gain 7.8 percent from a year ago, according to Reuters, down from a July outlook for growth of 17.6 percent.
Meanwhile, Apple hit an all-time high sinceits IPO in Dec 1980 after Goldman Sachs raised its price target on the iPhone maker to $550 from $530. However, the stock finished slightly lower.
Also on the tech front, Netflix rallied to lead the S&P 500 gainers after online DVD rental company launched in Britain and Ireland, going up against rival Lovefilm, owned by Amazon . The firm soared more than 20 percent in the previous week. (Read More:Netflix Has 'Crazy' Upside: Hedge Pro)
IBM slipped after BMO cut its estimates for the tech giant, citing a tough quarter ahead.
Bristol-Myers Squibb has agreed to acquire Inhibitex for about $2.5 billion to gain access to its promising hepatitis C treatment. Inhibitex shares skyrocketed nearly 140 percent.
Also on the M& Afront, Lions Gate Entertainment rallied amid news the firm nearing a deal to buy "Twilight" movie producer Summit Entertainment for about $400 million.
Elsewhere, analysts and executives at the Detroit auto show said they expected 2012 U.S. auto sales to grow 4 percent to 9 percent, the third consecutive annual gain. General Motors and its joint ventures sold 2.55 million vehicles in China in 2011, up 8.3 percent from a year earlier.
Venezuelan President Hugo Chavez said on Sunday that his country would not recognize any ruling by a World Bank tribunal in a multibillion-dollar arbitration case with Exxon Mobil .
On the economic front, consumer credit expanded in November, increasing $20.37 billion, according to a Federal Reserve report, the biggest gain since 2001. Economists had expected a gain of $7 billion, according to a Reuters poll.
The Treasury is scheduled to auction $66 billion in 3-year notes, 10-year notes and 30-year bonds on Tuesday through Thursday.
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On Tap This Week:
TUESDAY: NFIB small biz optimism index, wholesale trade, San Francisco Fed Pres speaks, Kansas City Fed Pres speaks, 3-yr note auction, New Hampshire Primary
WEDNESDAY: Weekly mortgage apps, Atlanta Fed Pres speaks, oil inventories, Philadelphia Fed Pres speaks, 10-yr note auction, Beige Book, Monti/Merkel meet; Earnings from Lennar, Chevron interim results
THURSDAY: BoE announcement, ECB announcement, jobless claims, retail sales, business inventories, 30-yr bond auction
FRIDAY: International trade, import & export prices, consumer sentiment, Richmond Fed Pres speaks; Earnings from JPMorgan
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