The Dow pulled off its fifth straight gain Monday but volume was some of the lightest this year as many investors took a wait-and-see approach to earnings season, which kicked off with results after the bell from Alcoa.
Microsoft was at the front of the Dow pack, up 2.3 percent, following a report in the Wall Street Journal that the software giant may be teaming up with Fujitsu on cloud computing. Brokerage Janney Capital raised its ratings on the tech giant to "buy" from "neutral."
Walmart wasn't far behind as investors played it safe with some bets in consumer staples.
Intel rounded out the Dow's top three as investors played the stock ahead of the chip maker's earnings, due out on Tuesday.
Materials, industrials and health care were the weakest sectors, with United Technologies , DuPont and Alcoa at the back of the Dow pack.
Alcoa was one of the worst performers in regular trading but rebounded more than 3.5 percent after-hours as the aluminum maker beat earnings expectations and raised its forecastfor growth in global aluminum demand for this year to 12 percent from 10 percent.
Railroad operator CSX also delivered strong results, an encouraging sign for the earnings season.
Reports are due out later in the week from Google , Bank of America , Citigroupand General Electric .
Some market pros say stocks could get a boost this earnings season.
"One thing that's kept us much more positive is the fact that corporate cash flows are huge," Bill Stone, chief investment strategist at PNC Wealth Management. "Cash flow has been extremely strong. It certainly bolsters the case when you look at cash flow yields. Companies are very mindful of their cash flows and have themselves set up very nicely."
Paul Miller of FBR Capital Markets said big banks will likely report strong earnings.