The Dow managed to close above 11,000 after some late-session turbulence but 1,200 proved just out of reach for the S&P.
The Dow rose over 8 points, or about 0.1 percent, to close at 11,005.97. It was the Dow's third straight gain and the first time it's closed above that level since September 2008. The S&P closed at 1,196.48 after reaching as high as 1,199.20 intraday.
The CBOE volatility indexdropped to a nearly two-year low below 16.
Wall Street's major averages are coming off six straight weeks of gains, and the Dow finally managed to crack the 11,000 mark on Friday, though it only briefly popped above that benchmark before dropping back. Today will be the real test of whether it can finish above that level.
Euro-zone nations reached an agreement to provide up to $40 billion in aidto Greece. But Greece hasn't yet asked for the aid and Germany, which would be the biggest contributor, said there may be a potential snag — European nations would then have to agree to release the aid once Greece asks for it.
Among the buzz here in the U.S., the National Bureau of Economic Research, which is charged with declaring start and end dates of recessions, says it can't yet declare this recession over yet.
Today's best performers were financials, utilities and industrials.
American Express, Alcoa and Chevron were the leaders on the Dow.
Alcoa shares rose ahead of its latest quarterly results, which are due out after the closing bell and mark the unofficial start to earnings season.
Two brokerage firms downgraded Alcoa last week as the firm is only expected post earnings of 10 cents a share, but earnings are expected to ramp up in subsequent quarters, culminating with $1.08 in the fourth quarter.
Overall, it's expected to be a decent earnings season: S&P 500 earnings are expected to be up 36.8 percent from a year ago, according to thte latest survey by Thomson Reuters. It would be the second straight increase in earnings.
Reports are due out later in the week from Intel, JPMorgan Chase, Google, Bank of America and GE.
US banks are expected to turn in strong resultsfor the first quarter despite subdued markets for equity trading and investment banking.
Citigroup shares gained 2 percent after CEO Vikram Pandit said the bank is looking to cut 40 percent of its assets from their peak before the financial crisis as the company looks to return to its banking roots.
AIG shares jumped 8 percent after the company said it realized a loss of up to $2 billion last year, as its Financial Products unit unwound most of its remaining tradeswith Goldman Sachs .
Goldman shares ended slightly lower.
Palm jumped 17 percent, after rocketing 40 percent in the past few weeks amid speculation that it's a takeover target. Among the names being tossed about as potential suitors are Chinese PC maker Lenovo and Taiwanese handset maket HTC.
Hewlett-Packard hit a 9 1/2-year high, then ended relatively flat, after the hardware and software maker completed its acquisition of 3Com.
And Caterpillar rose after Baird raised its rating on the stock to "outperform" from "neutral," and ratcheted up its price target to $88 from $60.
More M&A buzz: Power producer Mirant has agreed to take over rival RRI Energy . The deal creates one of the largest independent U.S. power producers.
Retail stocks were mixed ahead of the government's retail-sales report, due out later this week.
Shares of teen retailers Abercrombie & Fitch and Hot Topic ended lower after Barron's cautioned that the category may be overvalued.
Limited and Bed, Bath & Beyond were among the retail gainers.
MONDAY: Earnings from Alcoa
TUESDAY: Trade balance; import/export prices; Fed's Lacker speaks; earnings from Intel
WEDNESDAY: Weekly mortgage apps; CPI; government's retail-sales report; Fed's Pianalto, Lacker, Warsh & Fisher speak; business inventories, crude inventories; beige book; earnings from JPMorgan Chase
THURSDAY: Taxes due; Empire state manufacturing survey; industrial production; Philly Fed report; Fed's Lacker, Bullard & Lockhart speak; housing-market index; earnings from Google, AMD
FRIDAY: State unemployment rates; housing starts; Fed's Warsh speaks; consumer sentiment; earnings from Bank of America, GE, Mattel & Gannett
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