The Standard & Poor's 500 index rose, approaching a third straight yearly advance and extending gains after equity gauges climbed past milestones last week.
Gilead Sciences increased 3.7 percent as biotechnology shares rebounded for a third day. Energy companies rose despite a drop in crude prices. Losses in Microsoft, Intel and International Business Machines weighed down the Dow Jones Industrial Average.
The S&P 500 rose 0.1 percent to 2,090.57 at 4 p.m. in New York. The Dow fell 15.48 points, or 0.1 percent, to 18,038.23. The Russell 2000 index gained 0.3 percent. More than 4.7 billion shares changed hands on U.S. exchanges, 32 percent below the three-month average. Volume for U.S. exchanges on Dec. 26 was the lowest this year for a full day of trading.
Equities are approaching the end of the year at record levels, bolstered by the fastest expansion for the American economy in more than a decade. The Federal Reserve's pledge on Dec. 17 to be patient in raising interest rates helped the S&P 500 fully recoup a 5 percent loss in the first half of the month.
"There's lots for investors to digest going into 2015," said James Buckley, who helps oversee about $47 billion as
a portfolio manager at Baring Asset Management in London. "The focus will likely be on more macro-type events immediately. The U.S. economy is the one real bright spot. That economy is doing phenomenally well. That in itself is reason to be optimistic."
The S&P 500 has gained 13 percent this year, while the Dow is up 8.8 percent in 2014 after climbing above 18,000 for the first time last week. The Russell 2000 of small-cap stocks climbed to an all-time high on Dec. 26. The Nasdaq composite index reached its highest since March 2000 that same day, closing about 5 percent below its record.
U.S. stocks have overcome upheavals in 2014 that threatened to derail a bull market in its sixth year, ranging from violence in the Ukraine to an Ebola outbreak and a bear market in oil prices. The S&P 500's worst retreat was only 7.4 percent, and the gauge recovered from each of its declines of 4 percent or more within one month.
The S&P 500 has not seen a four-day decline since December 2013. The benchmark gauge has declined for four consecutive trading sessions at least once every year since at least 2000.
The Chicago Board Options Exchange volatility index, a measure of demand for options on the S&P 500, dropped 12 percent last week. It gained 3.9 percent to 15.06 today. The gauge, also known as the VIX, has tumbled 36 percent from a two-month high on Dec. 16.
The S&P 500 trades at 18.5 times profits, the highest level since 2010 and compares with the average of 16.3 over the past decade.
Analysts forecast earnings for the S&P 500 to increase 6.4 percent next year. Consumer-discretionary, technology and raw- materials companies are expected to post the fastest growth, with profits rising at least 13 percent, estimates compiled by Bloomberg show.
Concerns about Greece
Stock futures slumped earlier Monday after Greek Prime Minister Antonis Samaras failed in his third and final attempt to persuade Parliament to back his candidate for head of state. Concern that anti-austerity party Syriza will win snap elections next month roiled stocks in Athens, as such an outcome risks the European Union's common currency and the start of the European Central Bank's bond-buying plan.
"We're seeing if people will try to add to performance before the year is over," Richard Sichel, chief investment officer at Philadelphia Trust, which oversees $2 billion, said in a phone interview. "There might be some trading around the edges by people looking for a little more performance. It's more of a stock-picker way of looking at it at this point."
Economic reports this week may show consumer confidence climbed in December, pending home sales rose in November, while an Institute for Supply Management index of manufacturing slipped this month, according to economists surveyed by Bloomberg.
Six out of 10 major group in the S&P 500 increased today. Utilities and consumer-discretionary companies gained the most, while technology and phone shares had the worst performance.
Biotech shares slumped last week amid concern health insurers and companies that manage patient's drug benefits will put new pressure on how much the industry can charge for breakthrough treatments. The selloff was prompted by Express Scripts' announcement that it would block its U.S. patients from getting Gilead's $1,100-a-pill hepatitis C medicine.
Energy shares rose 0.3 percent, even as oil erased an early rally. Crude reached a five-year low on speculation that a global supply glut that's driven crude into a bear market will continue through the first half of 2015.
IBM, Intel, Microsoft and Red Hat lost more than 0.9 percent. While Red Hat, Intel and Microsoft have rallied at least 25 percent this year, IBM is down 14 percent for 2014, heading for the worst performance in the Dow for a second straight year.