U.S. stocks closed mixed in low volume trade Monday, mostly shaking off a decline in oil prices ahead of the Federal Reserve's meeting later in the week. (Tweet This)
"Today's pretty much of a day where people shore up their positions ahead of the meeting," said JJ Kinahan, chief strategist at TD Ameritrade.
"I think it's very important that the market's been able to hold in there with all that's going on (in crude)," he said.
U.S. crude oil futures settled down $1.32, or 3.43 percent, at $37.18 a barrel, after briefly dipping below $37 earlier in the session.
As of the close, trade volume across the exchanges was just above 6 billion, on pace for the lowest trade volume day of the year so far.
The Nasdaq composite and Dow Jones industrial average recovered opening losses to eke out gains. Boeing contributed the most to gains in the Dow, while a rise in shares of Gilead Sciences, Amazon and Starbucks led the Nasdaq in the close.
"You're starting to see some of the Nasdaq and Nasdaq 100-type stocks lead the way higher. To me it feels like this is late in the game. People being positive ahead of BOJ and the Fed. ... They don't want to be left out," said Adam Sarhan, CEO of Sarhan Capital.
The Bank of Japan is scheduled to conclude its meeting overnight ET, while the Federal Open Market Committee kicks off its two-day meeting Tuesday.
The S&P 500 failed to hold gains in the close, ending about 2.5 points lower but holding a touch above its 200-day moving average. Energy and materials each closed more than half a percent lower to lead decliners. Consumer discretionary was the top advancer.
Leading the sector was Starwood Hotels & Resorts, which gained 7.8 percent after the firm said it received an unsolicited acquisition proposal for $76 a share.
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The major averages opened slightly lower and crept higher throughout the day.
"I guess with oil down we're taking a little breather here," said Peter Boockvar, chief market analyst at The Lindsey Group.
"I think this week is really going to be determined by the Fed," he said.
The major data for the week include retail sales due Tuesday, ahead of the highly anticipated Fed meeting statement and press conference scheduled for Wednesday. No move on rates is expected, but policymaker commentary will be scrutinized for indications on the path of tightening.
Read MoreBear market rally or bull? Fed, data may hold clue
Treasury yields edged off session lows, with the near 0.96 percent and the 10-year yield at 1.97 percent.
The U.S. dollar index held slightly higher, with the euro at $1.1085 and the yen at 113.82 yen against the greenback.
Oil extended losses as hopes of a coordinated production freeze faded.
The Iranian News Agency Shana quoted Russian Energy Minister Alexander Novak saying Russia accepts Iranian rights to increase oil output post sanctions, according to Reuters.
Over the weekend, Iran Oil Minister Bijan Zanganeh said the country would join discussions among other producers about a possible oil production freeze after its own output reached four million barrels per day, according to a Reuters article citing Iran's ISNA news agency.
"I think that got investors a little worried. That's got crude on the defensive now," said John Caruso, senior market strategist at RJO Futures.
The major U.S. averages closed sharply higher Friday, with the S&P 500 and Dow Jones industrial average both topping their 200-day moving averages, which traders are watching as a resistance level.
A rise in oil prices and a more positive view of Thursday's European Central Bank stimulus announcements helped U.S. stocks post their first four-week win streak since November.
Major U.S. Indexes
European stocks closed higher, off session highs despite declines in oil prices.
Asian equities closed higher, with the Nikkei 225 and Shanghai composite both up more than 1.7 percent.
Both China's central bank governor and new securities regulator spoke over the weekend.
The People's Bank of China won't resort to excessive stimulus to bolster growth but will keep a flexible stance in the event of an economic shock — domestic or global, Governor Zhou Xiaochuan said, while reiterating the authority's prudent monetary policy, Reuters reported.
China will not reintroduce the circuit breaker mechanism to its stock markets in the next few years, Liu Shiyu, chairman of the China Securities Regulatory Commission said in a Reuters report.
Read More Early movers: TFM, YHOO, UAL, PFE, TSLA, DIS, PFE, GM, BX & more
The Dow Jones industrial average closed up 15.82 points, or 0.09 percent, at 17,229, with Boeing leading advancers and Pfizer the greatest decliner.
The closed down 2.55 points, or 0.13 percent, at 2,019.64, with materials leading six sectors lower and consumer discretionary the top gainer.
The Nasdaq composite closed up 1.81 points, or 0.04 percent, at 4,750.28.
The CBOE Volatility Index (VIX), widely considered the best gauge of fear in the market, traded below 17.
Decliners were a step ahead of advancers on the New York Stock Exchange, with an exchange volume of 858 million and a composite volume of nearly 3.5 billion.
Gold futures settled at $1,245.10 an ounce, down $14.30.
—Reuters contributed to this report.
On tap this week:
Tuesday
Bank of Japan meeting concludes, FOMC meeting begins
Earnings: FactSet, HD Supply Holdings, DSW, Oracle
8:30 a.m.: PPI
8:30 a.m.: Retail sales
8:30 a.m.: Empire State manufacturing survey
10 a.m.: Business inventories
10 a.m.: Housing market index
4 p.m.: Treasury international capital
Wednesday
Earnings: Cheetah Mobile, RedEx, Ctrip.com Intl., Guess, Herman Miller, Jabil Circuit
7 a.m.: Mortgage applications
8:30 a.m.: CPI
8:30 a.m.: Housing starts
9:15 a.m.: Industrial production
10:30 a.m.: Oil inventories
1 p.m.: European Central Bank President Mario Draghi gives welcoming remarks at ECB Contemporary Art From Poland Exhibition
2 p.m.: FOMC meeting announcement
2:30 p.m.: Fed Chair Janet Yellen press conference
Thursday
Bank of England monetary policy announcement and minutes
Earnings: Tencent, Michaels Cos., Intl. Game Technology, Lands' End
8:30 a.m.: Jobless claims
8:30 a.m.: Philly Fed business outlook survey
8:30 a.m.: Current account
10 a.m.: JOLTS
10 a.m.: Leading indicators
10:30 a.m.: Natural gas inventories
4:30 p.m.: Fed balance sheet/Money supply
Friday
Quadruple Witching
Earnings: Tiffany
9 a.m.: New York Fed President William Dudley speaks
10 a.m.: Consumer sentiment
10 a.m.: Atlanta Fed business inflation expectations
11 a.m.: Boston Fed President Eric Rosengren speaks
1 p.m.: Oil rig count
1:30 p.m.: St. Louis Fed President James Bullard
*Planner subject to change.
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