The S&P 500 struggled to break above its high for the year on Monday as investors awaited the coming earnings season that begins next week to assess the strength of the stock market.
Investors were also on the lookout for the expected increase in euro-zone interest rates this week.
The benchmark S&P 500 hovered slightly below 1,333, which it has not closed above since mid-February. The level is double the 12-year low hit in March 2009 and not far from 1,344, the S&P's highest since June 2008.
Bruce Zaro, chief technical strategist at Delta Global Asset Management in Boston, said earnings season would likely push the S&P 500 to 1,400 by mid-May as stocks come off the seasonally strong November-April period.
If we make a successful break from here, I think you've got the 1,400 range and I think that's probably likely during the final seasonally favorable push, he said.
The Dow Jones industrial average <.DJI> was up 12.22 points, or 0.10 percent, at 12,388.94. The Standard & Poor's 500 Index <.SPX> was down 1.35 points, or 0.10 percent, at 1,331.06. The Nasdaq Composite Index <.IXIC> was down 6.22 points, or 0.22 percent, at 2,783.38.
On Friday, the S&P recorded its best two-week period since December, and the Dow industrials <.DJI> hit their highest intraday level since June 2008. Encouraging jobs data during the week helped cement hopes of a labor market recovery.
The European Central Bank, at its policy meeting on Thursday, is expected to raise rates by 25 basis points from a record low in reaction to rising inflationary pressures in the euro zone. Two more 25-basis-point rate hikes are factored in by year-end.
With the ECB on Thursday expected to raise interest rates and the minutes from the March FOMC meeting out tomorrow where maybe we'll get some color on the exit strategy debate, the question this all brings is what will the impact be of higher interest rates on still overleveraged economies, said Peter Boockvar, equity strategist at Miller Tabak & Co in New York.
The lack of significant economic data on Monday, nuclear and other quake-related problems in Japan and unrest in Libya, Syria and other countries in the oil-rich region of North Africa and the Middle East could translate into low volume on Wall Street. By the afternoon, the volume was the lowest so far this year and followed the lowest weekly volume of 2011 last week.
Brent crude extended gains to a 2-1/2-year peak above $120 a barrel on concerns about Libya's conflict, Middle East unrest and potential supply threats. U.S. crude oil futures settled at $108.47 a barrel, up 53 cents, for the highest close since September 2008. Investors are concerned that a spike in oil could choke off a consumer recovery.
Japanese investment bank Nomura maintained a neutral view on semiconductor stocks, citing weakened demand, peak gross margins and higher capital spending in the sector.
The Philadelphia semiconductor index <.SOX> fell 1.2 percent and has lost 2.9 percent over the past four days.
Shares of defense contractor General Dynamics
Southwest Airlines Co
(Reporting by Angela Moon; Editing by Jan Paschal)