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Stocks Close Flat; Apple Ends at All-Time High

Stocks eased off their worst levels to end mostly flat in another thin session Monday, but still remained around four-year highs, lifted by gains in techs.

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The Dow Jones Industrial Average slid 3.56 points, or 0.03 percent, to finish at 13,271.64, led by AmEx . The blue-chip index traded in a narrow 46-point range.

The S&P 500 and the Nasdaq both lost less than a point to close at 1,418.13 and 3,076.21, respectively. The CBOE Volatility Index, widely considered the best gauge of fear in the market, gained near 14.

Among key S&P sectors, consumer discretionary and telecoms dragged, while techs gained.

“If there is a reversal [in the recent rally], it won’t happen on much and it will be a big move so I’d be playing very defensive right now,” Matt Cheslock of Virtu Financial told CNBC’s “Power Lunch.” “ETFs are a good way to spread your risk across many asset bases.”

Trading volume has been razor-thin in recent weeks due to the summer holiday season, little economic data, and lack of meaningful news from Europe.

“Most of the market is doing indexing and allowing asset allocators to buy and sell ETFs and those are pretty static positions,” noted Josh Brown, vice president of Fusion Analytics. “We really don’t have an investor class that’s actively buying and selling stocks. The day-trading community has dwindled because of attrition, they’ve been up against algorithms that have knocked a lot of them out and so it’s foolish to expect to return to the volumes of the late 90s or even the middle part of the past decade.”

“Investors are in the market but in a different way than they used to be,” he said.

Apple advanced to hit new highs, after topping its $600 billion market cap last Friday. The iPhone maker has now become the biggest stock ever, surpassing Microsoft's peak market cap of $618.9 billion in December 1999.

"We still think Apple stock is considerably undervalued today," Toni Sacconaghi, senior analyst at Sanford C. Bernstein told CNBC's "Squawk on the Street." "In terms of worries, Apple has to execute and have good products. So there's a lot riding on the iPhone 5...And in the short-term, there's a lot of investor expectations. Apple stock typically has big runups two months in advance of product cycles and we're seeing that right now."

Social-media shares were volatile after hitting record lows earlier in the session. Facebook rebounded after briefly sliding below $19 a share, while Groupon zigzagged, eventually finishing below $5 a share.

European shares closed loweras expectations over further stimulus waned. The European Central Bank downplayed earlier reports from German news magazine Der Spiegel it was considering setting interest rate thresholds for purchases of euro zone bonds. (Read More: Markets Bracing for Major ECB Bond Buying?)

Last week, German Chancellor Angela Merkel reiterated her support for ECB President Mario Draghi's strategy to help the euro zone. Merkel is scheduled to meet with French President Francois Hollande on Thursday. (Read More: Euro Crisis Revving Up Again—Fasten Your Seatbelts)

Among earnings, Lowe's tumbled after the home-improvement chain posted quarterly results that missed expectations and slashed its earnings outlook for the fiscal year.

On the M&A front, Coventry Health Care surged to lead the S&P 500 gainers after the company insurer Aetna has signed a deal to acquire the company for $5.6 billion in cash and stock. (Watch: Aetna CEO Says Health-Care Programs Are 'Busting Budgets')

Best Buy named Hubert Joly, former CEO of hospitality and travel company Carlson, as its new chief executive, in hopes to revive the struggling consumer-electronics retailer. The company also said founder Richard Schulze has rejected an offer from the board to conduct due diligence in connection with his proposal to take the company private at a valuation of more than $8 billion. Shares tumbled to lead the S&P 500 laggards. Best Buy is slated to post earnings Tuesday.

With little economic reports on tap this week, investors will be looking ahead to the release of the Federal Reserve's latest minutes from its July meeting. Meanwhile, Chairman Ben Bernanke is expected to speak at Jackson Hole, Wyoming at the end of the month.

—By CNBC’s JeeYeon Park (Follow JeeYeon on Twitter: @JeeYeonParkCNBC)

What's Happening This Week:

TUESDAY: Fed’s Lockhart speaks; Earnings from Best Buy, Medtronic, Dell
WEDNESDAY: Weekly mortgage apps, existing home sales, oil inventories, FOMC Minutes; Earnings from H-P
THURSDAY: Jobless claims, PMI manufacturing index flash, new home sales, FHFA home price index; Earnings from Gold Fields, Hormel Foods
FRIDAY: Durable goods orders, USDA food prices outlook

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