A flurry of corporate deals also sent some stocks sharply higher.
Caterpillar Inc , the heavy machinery maker, also raised its full-year profit forecast, saying economic conditions are definitely improving. The stock gained 5.7 percent to $72.64 and was the top boost on the Dow.
Bank shares fell, with Citigroup Inc down 2.3 percent to $4.75 after the U.S. Treasury said it would begin selling part of the 27 percent stake it holds in the bank after $45 billion in bailouts.
A sweeping overhaul of financial regulations was expected to face a crucial Senate test vote on Monday. A Republican leader said all 41 Republican senators would likely vote against launching floor debate and try instead to negotiate changes.
The KBW bank index <.BKX> fell 0.7 percent.
There are a number of things (in the reform) that could curtail some of (the banks') more profitable activities, particularly what relates to derivatives and proprietary trading, said Joseph Battipaglia, market strategist at Stifel Nicolaus in Yardley, Pennsylvania.
The Dow Jones industrial average <.DJI> gained 45.72 points, or 0.41 percent, to 11,250.00. The Standard & Poor's 500 Index <.SPX> rose 1.65 points, or 0.14 percent, to 1,218.93. The Nasdaq Composite Index <.IXIC> added 3.43 points, or 0.14 percent, to 2,533.58.
On the New York Stock Exchange nearly nine shares rose for every five that fell, while on the Nasdaq advancers beat decliners by about three to two.
Whirlpool Corp surged more than 15 percent to an all-time high above $118, lifting the S&P consumer discretionary sector <.GSPD>. Whirlpool, the world's largest appliance maker, reported earnings that beat estimates. The company also raised its full-year profit view.
Hertz Global Holdings Inc said it agreed to buy Dollar Thrifty Automotive Group Inc for about $1.2 billion, while Charles River Laboratories International , the U.S. clinical research company, said it plans to acquire WuXi PharmaTech Inc for $1.6 billion.
Stifel Financial Corp will acquire rival Thomas Weisel Partners Group Inc for about $300 million in stock, the companies announced.
Dollar Thrifty gained 8.8 percent to $42.27, while WuXi surged 17.3 percent to $19.43, and Thomas Weisel soared 64 percent to $7.14. Hertz shares jumped more than 17 percent to $15.11.
Worries over Greece's ability to finance itself weighed on equity and other markets. Germany set tough terms to secure emergency aid for Athens, increasing uncertainty over a financial rescue that pushed the cost of insuring against a Greek debt default to a record high.
An index of New York-traded shares of Greek companies <.BKGR> fell 2.2 percent.
(Editing by Kenneth Barry)