The U.S. stock market gained, pushing the Dow Jones Industrial Average above 17,000 and its previous closing record on Monday as investors welcomed better-than-expected earnings from Citigroup Inc. and a flurry of mergers and acquisitions.

The banking heavyweight's profit topped estimates, even as it reached a $7 billion settlement with the U.S. Justice Department over shoddy mortgage-backed securities. Shares jumped 4%.

The S&P 500 (SPX) rose 10 points, or 0.5%, higher at 1,977.50, with financial stocks leading the gains. The Dow Jones Industrial Average (DJI) added 140 points, or 0.8%, to 17,077.60, topping its previous record close level.

The Nasdaq Composite (RIXF) gained 24 points, or 0.5%, to 4,438.91.

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The pace of the second-quarter earnings season will move into high gear this week with results due from large companies in the financial and technology sectors, the two largest sectors in the S&P 500 index.

Citigroup Inc. (C): The bank said it would pay $7 billion to settle claims regarding sales of mortgages before the financial crisis. The company also beat consensus forecasts for second-quarter earnings and revenues.

The banking sector and "valuations are going to remain the main focus for this week, as we will get the earnings from some of the biggest tycoons of Wall Street," said Naeem Aslam, chief market analyst at AvaTrade, in a note. "The expectations are high, and investors are hoping that these earnings will cement the optimism that growth is on track in the U.S. and the revenues are healthy."

There are no Federal Reserve speakers or data reports on the calendar Monday, though Fed Chairwoman Janet Yellen will field questions from Congress on Tuesday and Wednesday. This week will see the retail sales report for June on Tuesday, which could offer clues about whether consumers are starting to feel more optimistic. Also on the docket this week are reports on new home construction, manufacturing and consumer sentiment.

Monday lived up to its merger day status, with a flurry of companies announcing deals. Shares of drug maker AbbVie Inc.(ABBV) fell 0.8% after Shire PLC (SHPGY) said Monday it has received a new takeover offer from AbbVie, and that it's willing to recommend the deal, now valued at more than $53 billion, to its shareholders.

Mylan Inc. shares (MYL) tacked on 2.9% following news of the drug company's plan to buy a portion of Abbott Laboratories (ABT) generics business in a deal valued at $5.3 billion.

Apple Inc. (AAPL): Barclays upgraded its view of the tech giant's shares to overweight. Apple also denied that the location tracker on its iPhone is a threat to Chinese national security. (Read more in Movers and Shakers column: http://www.marketwatch.com/story/citigroup-is-mondays-stock-to-watch-2014-07-13.)

In the commodities market, Crude oil futures(CLQ4) swung between small gains and losses after logging a third consecutive weekly decline. Gold futures(GCQ4) tumbled Monday as solid gains for stocks and lackluster physical demand prompted investors to book profits on recent gains.

Asian stocks overnight finished broadly higher, with Tokyo's Nikkei Average ending up by 0.9%. European stocks rose as fears about the soundness of Portuguese banks receded.