Stocks trimmed gains and turned mixed amid light volume Monday as retail and technology stocks slipped. The market had been higher earlier in the session amid a flurry of M&A activity, and as investors awaited word on the fate of the Bush-era tax cuts.
The Dow Jones Industrial Average rose 18.24 points, or 0.16 percent, to 11,428.56, after rising 60 points to above its high for the year earlier in the session. The Dow and the other major indexes ended last weekon a positive note.
Caterpillar, Chevron and Merck gained, while Hewlett-Packard and Bank of America fell.
The S&P 500 eked out a 0.06 points, or 0.005 percent, to close at 1,240.46. The Nasdaq fell 12.63 points, or 0.5 percent, to 2,624.91, failing to hit a nine-day winning streak.
Most key S&P 500 sectors gained led by energy, materials and utilities, although consumer discretionary and technology fell.
The CBOE Volatility Index, widely considered the best gauge of fear in the market, fell to below 17, its lowest levels since April.
VIX futures were also trading at low levels, with the VIX for December delivery trading only about a point higher the VIX itself, Nate Peterson, senior derivatives analyst at Charles Schwab told CNBC.com.
"I think the belief is, closing out the year, (traders) don’t expect a lot of volatility or a pullback to the market," Peterson said.
Congress is set to vote on a tax package compromise put forward by President Obama that would extend Bush-era tax cuts for two years. The extension is expected to pass even though it proved highly controversial with Democrats.
Treasurys had slumped early in the session anticipation the tax plan would stimulate the economy and add to inflation. The price of the 10-year Treasury note rose by the ending of the session, lowering its yield to 3.28 percent. Earlier, the 10-year yield hit a six-month high.
The dollar , meanwhile, fell against a basket of currencies as the euro rose 1.4 percent against the U.S. currency. Gold gained nearly 1 percent to settle at $1,397 an ounce.
A flurry of deals and acquisitions helped boost the market earlier in the session.
Dell agreed to buy Compellent Technologies for about $960 million in cash, as it pushes into cloud computing.
General Electric announced plans to buy Wellstream , a British oilfield services company, for about $1.3 billion.GE is the parent of CNBC.
Thermo Fisher Scientific rose after the scientific instruments maker said it will acquire Dionex for $2.1 billion to broaden its lab-equipment offerings.
Energy stocks advanced as oil rose to more than $88 a barrelon news China's industrial output topped expectations in November, and after the OPEC agreed to keep its production targets unchanged.
Cabot Oil & Gasadvanced more than 5 percent after news the independent oil and gas company received an air quality permit for a compressor station to begin construction. Chevron and Exxon Mobilalso rose.
Materials also gained with Freeport McMoran , ArcelorMittal and Posco climbing more than 2 percent each.