Stocks eked out gains after hovering around the flatline for much of the session Monday, as investors remained cautious amid recent mixed economic reports. The Nasdaq rallied, thanks to a strong performance in Internet stocks.
NYSE total volume settled at its second lightest level this year, with just 2.64 billion shares changing hands. April 21 was the only day this year that's booked lighter volume.
The Dow Jones Industrial Average rose 20.55 points, to finish at 16,511.86. JPMorgan and Merck led the blue-chip gainers.
The climbed 7.22 points, to end at 1,885.08. And the Nasdaq rallied 35.23 points, to close at 4,125.82.
The CBOE Volatility Index (VIX), widely considered the best gauge of fear in the market, traded near 12.
Equities have come under selling pressure in recent days, with the S&P 500 logging its first back-to-back losing weeks since January. Small-cap stocks, often seen as the first beneficiary of growth, have tumbled with the Russell 2000 index briefly dipping into correction territory last week.
Meanwhile, shares of AT&T slumped after the telecom company launched a $48.5 billion bid for satellite TV operator DirecTV on Sunday. The deal comes as Comcast awaits regulatory approval of its $45 billion bid for Time Warner Cable. Comcast is the parent company of CNBC.
General Electric traded flat despite reports that Germany's Siemens could make a rival bid for Alstom's power business as early as this week. General Electric has already submitted a 12.35 billion euro ($16.9 billion) bid, but Alstom has opened its books to Siemens sunder strong political pressure from the French government.
Campbell Soup dropped sharply after the canned soup maker reported weaker-than-expected quarterly sales and lowered its full-year revenue growth forecast.
Apparel retailer Urban Outfitters is scheduled to post earnings after the closing bell.
No major economic reports are due Monday.
Meanwhile, San Francisco Fed President John Williams said the central bank is moving toward normalizing U.S. monetary policy, and is on track to raise rates probably some time in the next year.
—By CNBC's JeeYeon Park
On tap this week:
TUESDAY: Fed's Plosser speaks, Fed's Dudley speaks, Microsoft Surface event; Earnings from Home Depot, Dick's Sporting Goods, Staples, TJX
WEDNESDAY: Mortgage applications, Fed's Dudley speaks, Fed's Yellen speaks, oil inventories, Fed's George speaks, Fed's Kocherlakota speaks, FOMC minutes, Boeing investor conference; Earnings from Lowe's, Target, Hormel, PetSmart, Tiffany, American Eagle Outfitters, L Brands, NetApp, Williams-Sonoma
THURSDAY: Jobless claims, Chicago Fed nat'l activity index, PMI mfg index flash, existing home sales, leading indicators, Kansas City Fed mfg index, Fed's Williams speaks, Facebook annual mtg, Intel shareholder mtg; Earnings from Best Buy, Dollar Tree, Hewlett-Packard, Gap, Marvel Tech, Ross Stores, Aeropostale, Gamestop, TiVo
FRIDAY: New home sales; Earnings from Foot Locker
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--Reuters contributed to this story.