Stocks were little changed on Monday as investors were cautious before moves by euro zone officials to keep a debt crisis contained, but the S&P 500 stood within points of a new high for the year.
Euro zone finance ministers were under pressure as they met to increase the size of a 750 billion euro safety net for debt-stricken members. But Germany rejected any such move.
Despite the day's dip, analysts see the S&P 500 soon breaking out of its recent range and surpassing its current intraday high for the year just above 1,227 reached on November 5.
We're at the April highs. We're backing and filling, and we've been doing that since November 3. The presumption is a little bit longer, not that much, and then it will be free to break out, said Carter Worth, chief market technician at Oppenheimer & Co in New York.
The objective would be 1,280 (on the S&P 500)...something between a 4 to 5 percent advance from the breakout jump here.
Analysts view key resistance for the benchmark index at 1,228 because it's just above the year's high and coincides with the 61.8 percent Fibonacci retracement of the 2007-2009 bear market slide.
There are a lot of near-term things going in the market's favor, said John Kosar, director of research at Asbury Research in Chicago, noting that the VIX volatility index <.VIX> trading near 18 indicates complacency, fearlessness.
Also looking ahead in equities, Goldman Sachs Asset Management Chairman Jim O'Neill, speaking at the Reuters 2011 Investment Outlook Summit in New York, gave a bullish view on stocks, saying global equity markets are likely to see gains of up to 20 percent through 2011.
A decline in the euro added to the pressure on stocks. Stocks and the euro have moved in tandem of late, with the euro view as a proxy for debt concerns.
The Dow Jones industrial average <.DJI> was down 4.39 points, or 0.04 percent, at 11,377.70. The Standard & Poor's 500 Index <.SPX> was down 1.44 points, or 0.12 percent, at 1,223.27. The Nasdaq Composite Index <.IXIC> was up 0.22 points, or 0.01 percent, at 2,591.68.
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U.S. Federal Reserve Chairman Ben Bernanke over the weekend told the CBS television program 60 Minutes the Fed could increase its program of buying $600 billion in U.S. government bonds if the economy fails to respond or unemployment stays too high.
(Additional reporting by Leah Schnurr; Editing by Kenneth Barry)