The government said before trading began that orders for long-lasting goods rose in December by 4.6 percent, helped by a 10 percent gain in orders for new aircraft. The report was a sign of strength for the manufacturing sector, a crucial driver of economic growth.
Heavy equipment maker Caterpillar said separately that its fourth-quarter net income exceeded analysts' expectations, after adjusting for the cost of a soured deal to buy a Chinese maker of roofing supports for mines. Caterpillar said it took a big charge in the quarter because the Chinese company had misrepresented its finances.
Caterpillar Inc. said it expects growth in China to improve without regaining the levels seen in 2010 or 2011. The stock was the biggest gainer in the Dow Jones industrial average, closing up $1.87, or 2 percent, at $97.45.
The Dow Jones transportation index, a proxy for future economic activity, edged higher, notching its tenth straight increase and its twelfth gain in the past 13 trading days.
A half-hour after trading began, the National Association of Realtors said that its index of pending home sales fell in December, suggesting that sales of previously occupied homes may slow in the coming months. The report, which was weaker than many economists had expected, helped push stocks lower for much of the morning. They were roughly flat by midday, and spent the afternoon swapping small bumps and dips.
The Dow closed down 14.05 points, or 0.1 percent, at 13,881.93. The S&P 500 fell 2.78, or 0.2 percent, to 1,500.18. The Nasdaq composite index added 4.59, or 0.2 percent, to 3,154.
The Dow and the S&P 500 are rapidly approaching their all-time closing highs, reached on Oct. 9, 2007. The Dow is about 282 points below its high of 14,164.53; the S&P 500 is 65 points shy of its record of 1,565.
Economic data may be less likely to boost the indexes because traders have become harder to impress as the data have strengthened in recent weeks, said Bill Stone, chief investment strategist with PNC Asset Management Group.
"Before, even if you came in just at expectations, that was like a victory," he said. Because of the market's recent upturn, he said, "you get less of a pop for just making the numbers."
Among companies in the S&P 500 that reported earnings Monday, Biogen Idec Inc. said its fourth-quarter net income slipped nearly 3 percent because of a tax charge and higher expenses. Still, the biotech drug maker rose $3.79, or 2.6 percent, to $149.99.
Roper Industries Inc., which makes medical and industrial equipment, said its fourth-quarter net income rose 18 percent. But the company issued mixed guidance for the current quarter and full year 2013. It fell 33 cents to $118.50.
Oil company Hess Inc. was the biggest gainer in the S&P 500, adding 6.1 percent after the company said it plans to sell its U.S. terminal network, shutter its New Jersey refinery and continue shifting its focus to exploration and production. Hess also said that the hedge fund Elliott Associates plans to seek regulatory approval to buy a major stake in the company. Hess rose $3.58 to $62.48.
Several big tech companies reported their results after the market closed and saw big price swings in after-hours trading:
• Web portal Yahoo Inc. rose 81 cents, or 4 percent, to $21.12 after saying its fourth-quarter earnings topped analyst estimates as an upturn in its international investments helped end a three-year revenue slump.
• Hard disk maker Seagate Technology PLC said it beat analysts' estimates in its results for the fiscal second quarter ended Dec. 28. It rose 69 cents, or 1.8 percent, to $38.10 after hours.
• Cloud computing provider VMWare Inc. said its net income edged higher, but the company announced guidance that was far weaker than analysts had expected. VMWare lost $10.83, or 11 percent, to $87.49 after hours.
Strong corporate earnings helped push the S&P 500 through the 1,500 milestone Friday after several calm, relatively news-free weeks. In addition to companies' performance, traders have been encouraged by signals that housing market is improving steadily and hiring is picking up, albeit slowly.
There will plenty of fresh data to drive trading this week, including retail sales, economic growth and the government's report on hiring and employment in January, which is due out Friday. More than one-fifth of the companies in the S&P 500 will report fourth-quarter earnings this week.
Stone said stocks are trading sideways in part because many investors are awaiting economic reports later this week, especially the employment report. There is agreement among economists and analysts that the economy slowed in the fourth quarter, he said, and this week's numbers will help answer the question of "how slow, and how much did it impact employment."
The yield in the benchmark 10-year Treasury note rose to 1.97 percent from 1.95 percent late Friday, reflecting lower demand for ultra-safe investments. After Monday's factory orders report, the yield rose briefly above 2 percent for the first time since April. A bond's yield rises as demand for it decreases.