Stocks advanced in thin trading Monday after European finance ministers reassured investors a Greek debt default can be avoided, soothing worries over a spreading euro zone credit crisis.
The Dow Jones Industrial Average climbed above the psychologically-important 12,000-mark after snapping a six-week losing streakon Friday amid thin, choppy trading.
Microsoft and Caterpillar led the blue-chip gainers.
The S&P 500 and the tech-heavy Nasdaq turned higher. Many traders are keeping their eyes on the 1,245 to 1,250 as the next support level on the S&P. The CBOE Volatility Index, widely considered the best gauge of fear in the market, slipped below 22.
Among the key S&P sectors, consumer staples and industrials were the top gainers.
With no notable economic news Monday, “we’re watching the Greek play today,” said Brian Battle, vice president of trading at Performance Trust Capital Partners. “The headline is that the political will of the European union is finally meeting economic reality.”
"The approval of the Greek parliament is absolutely essential and it will have to arrive in a timely fashion so we can take a decision on July 3,'' said Jean-Claude Juncker, head of the EU finance ministers.
Meanwhile, Evangelos Venizelos, Greece's new finance minister, said he would strive to ensure the already-reworked austerity package was approved.
Euro zone finance ministers postponed a decision on extending 12 billion euros($17 billion) in emergency loans to Greece, saying Athens would first have to introduce harsh austerity measures.
The ministers said they expected the money, the next tranche in a 110 billion euro bailout of Greece by the EU and the IMF, to be paid by mid-July. Greece has said it needs the loans by then to avoid defaulting on its debt.
The euro gained against a basket of currencies. Meanwhile, gold gained near $1,545 an ounce.