Stocks rose on Monday adding to three weeks of gains for the S&P after strong earnings from Caterpillar and a number of proposed acquisitions boosted investor appetite for risky assets.
But market gains were limited as European policymakers deferred a final decision on a strategy to fight the region's sovereign debt crisis as they neared agreement on bank recapitalization and on how to leverage a rescue fund to try to stop bond market contagion. The leaders are due to meet on Wednesday.
I think the market is still hoping for a good answer from the summit and the earnings are really lending support to the market ... this could be enough to break the recent trend of sort of topping off at around 1,230 and move up higher, said Andrew Fitzpatrick, director of investments at Hinsdale Associates in Chicago.
The Dow Jones industrial average <.DJI> jumped 71.18 points, or 0.60 percent, at 11,879.97. The Standard & Poor's 500 Index <.SPX> was up 10.17 points, or 0.82 percent, at 1,248.42. The Nasdaq Composite Index <.IXIC> put on 32.65 points, or 1.24 percent, at 2,670.11.
The S&P 500 ended Friday with a third straight week of gains on optimism over Europe and as corporate earnings came in generally as expected.
Recent gains have pushed the S&P 500 to the top of its trading range between 1,230 and 1,250, where it has struggled to advance. Many investors are looking for progress in Europe before good earnings reports can push equities much higher.
Light volume suggested investors weren't entirely convinced of the move.
Equity markets have been susceptible to rapid and violent swings in recent weeks as traders latch on to headlines out of Europe.
(Reporting by Angela Moon; editing by Jeffrey Benkoe)