"How much longer can the buy the dip crowd stay in control? Until we get a day with the S&P on the upside with negative breath, a key reversal day or a break of support at 1,300," wrote Elliot Spar, chief market strategist at Stifel Nicolaus, in his daily note. "Expect the market’s resiliency to be tested on [Friday's] employment report."
Meanwhile, growth in U.S. nonfarm productivity declined in the fourth quarter, increasing at a slower-than-expected 0.7 percent annual rate, according to the Labor Department.
Ben Bernanke said rising federal budget deficits are posing a significant threatto the U.S. economy and are likely to cause a crisis if not brought under control. Bernanke's testimony comes after a week after the central bank decided to hold interest rates at a record low level until at least 2014.
Drugmaker Merck reported weaker-than-expected quarterly salesand expects relatively flat 2012 results.
Dow Chemical slumped after the chemical company posted a quarterly lossdue to a one-time charge that caused it to pay higher taxes at its Brazilian operations.
Qualcomm rallied after the tech company posted earnings that easily topped forecasts and boosted its 2012 outlook, thanks to growing demand for its wireless chips for smartphones. In addition, at least nine brokerages raised their price targets on the company.
Deutsche Bank fell after the financial firm posted a lossamid the ongoing sovereign debt crisis.
MasterCard edged higher after the credit-card provider posted earnings that topped estimatesfor the seventh-straight quarter.
Abercrombie & Fitch led the S&P 500 laggards, plunging to a 52-week low, after the teen apparel retailer forecast earnings well below analysts' expectations and the current year after a disappointing holiday performance. Ann also slumped after the women's clothing retailer said it expects earnings below estimates, hurt by weak sales and high discounts at its Ann Taylor stores.
Meanwhile, retailers reported mixed same-store salesresults in January. Target , Zumiez , Limited Brands and Costco all reported sales that exceeded estimates.
However, Macy's said same-store sales gained less than expected. Still, shares were trading higher after the company raised its earnings forecast for its fiscal fourth quarter.
Facebook made its long-awaited filingwith the SEC for an IPO. In the filing, the social networking giant said it hopes to raise up to $5 billion, though that number could go higher. The stock is expected to trade under the symbol "FB," though the exchange it will be traded on has yet to be determined.
Meanwhile, recent tech IPO stocks including Zynga, LinkedIn and Groupon jumped following the Facebook report.
In Europe, finance ministers are expected to agree on a second financing packagefor Greece by next Monday, which will help boost confidence in the euro zone public finances and help contain the region's sovereign debt crisis.
—Follow JeeYeon Park on Twitter: twitter.com/JeeYeonParkCNBC—
Coming Up This Week:
FRIDAY: Employment situation, factory orders, ISM non-mfg index; Earnings from Clorox
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