US stocks ended slightly higher on Monday in a light-volume session as investors stayed cautious ahead of corporate earnings and key auctions for European debt this week.
Alcoa Inc advanced 0.8% to $9.50 in extended trading after the largest US aluminium producer reported fourth-quarter revenue that beat Wall Street expectations, though a plunge in aluminum prices helped push the company into a loss.
As the first company in the Dow to report results, Alcoa is seen as the unofficial start to the earnings season. In the regular session Alcoa rose 3% to $9.43.
After breaking out of the gate with strong gains on the first day of trading in January, stocks have been confined to a tight range in daily moves and volume has been low. The S&P 500 faces strong technical resistance as it has been unable to pierce through 1,285, the closing high set in late October.
Google Inc closed out the trading session off 4.2% at $622.46 after Motorola Mobility Holdings Inc's warning of weaker-than-expected financial results raised concerns about Google's pending acquisition of the smartphone maker.
The Internet search company was the biggest drag on both the benchmark S&P 500 index and Nasdaq 100.
Months of summits and meetings have still not convinced investors that Europe will avoid messy defaults or a break-up of the euro zone.
"That is what the market wants to get a look at - what is it that these multinationals are seeing in the global environment that gives them pause, or is the tone going to be a little better than expected," said Peter Kenny, managing director at Knight Capital in Jersey City, New Jersey.
Debt sales by Spain and Italy later in the week should provide insight about investors' confidence in plans to solve the euro zone financial crisis.
"There is this sense that we really need to see something that is going to convince us that this EU challenge ... is a headwind that can be managed," Kenny said.
After meeting in Berlin, German Chancellor Angela Merkel and French President Nicolas Sarkozy warned Greece it will get no more bailout funds until it agrees with creditor banks on a bond swap and a deal to avert a potential default.
The Dow Jones industrial average gained 32.62 points, or 0.26%, to 12,392.69. The Standard & Poor's 500 Index gained 2.89 points, or 0.23%, to 1,280.70. The Nasdaq Composite Index gained 2.34 points, or 0.09%, to 2,676.56.
Volume was light with about 5.98 billion shares traded on the New York Stock Exchange, NYSE Amex and Nasdaq, below the daily average of 6.61 billion.
Chip makers rallied, with the PHLX semiconductor index up 2% after Deustche Bank upgraded the sector.
Juniper Networks Inc slipped 3.1% to $20.85 in extended trade after the network equipment maker cut its fourth-quarter outlook, primarily due to weaker-than-expected demand for routers from service providers.
Brocade Communications Systems Inc jumped 6.5% to $5.77 after Reuters reported the maker of switches and routers had received first-round bids from a handful of potential buyers as the company explores a sale.
Traders also await monetary policy announcements from the European Central Bank and the Bank of England due Thursday. Investors are keen to hear ECB President Mario Draghi's latest comments on ways to ease the debt crisis.
Fourth-quarter earnings for S&P 500 companies were expected to rise 7.8% from a year ago, according to a Thomson Reuters forecast, down from 17.6% predicted in July.
The lower revisions were due in part to expected fallout from the euro zone debt crisis and the region's sluggish economic growth.
Advancing stocks outnumbered declining ones on the NYSE by 1,898 to 1,077, while on the Nasdaq, advancers beat decliners 1,422 to 1,067.