Stocks rose on Monday, lifted by energy and financial shares as investors repositioned in anticipation of the new year.
The gains tacked on a further advance to December's rally, which has pushed the S&P 500 up 5.4 percent for the month and 11.6 percent for the year so far.
The financial sector <.GSPF>, which has lagged the broader market, was up 0.6 percent as investors scooped up bargains and bet the sector could be among the leaders next year.
Energy shares also led the way up as the price of oil rose 1 percent in choppy trading. Chevron
We have seen this year-end rally refuse to give up any ground, said Bucky Hellwig, senior vice president at BB&T Wealth Management in Birmingham, Alabama.
The combination of improving economic data, additional stimulus from the Federal Reserve and the extension of tax cuts was keeping equities in demand, said Hellwig.
The Dow Jones industrial average <.DJI> edged up 10.37 points, or 0.09 percent, at 11,502.28. The Standard & Poor's 500 Index <.SPX> gained 5.76 points, or 0.46 percent, to 1,249.67. The Nasdaq Composite Index <.IXIC> rose 14.27 points, or 0.54 percent, to 2,657.24.
U.S. markets will be closed on Friday to observe the Christmas Day holiday on Saturday.
On the downside, American Express tumbled 4 percent to $42.25. The stock is down about 9 percent since last Thursday when the Federal Reserve proposed limiting debit interchange fees at 12 cents per transaction.
Stifel Nicolaus downgraded American Express to hold from buy on Monday, saying the company is increasingly exposed as a cut in fees will significantly increase pressure on higher-cost payments alternatives like Amex.
It sounds like some of the airlines are getting sick of the delays in this Dreamliner and that is why it is down, said Stephen Massocca, managing director at Wedbush Morgan in San Francisco.
Among several deal announcements in recent months, AT&T Inc
Shares of Amazon gained 2.9 percent to $182.82.
Food and beverage company Sara Lee Corp
(Additional reporting by Chuck Mikolajczak; Editing by Kenneth Barry)