NEW YORK – Stocks pushed higher on Monday as bargain-hunters emerged after last week's selloff, though concerns of a drawn-out battle over the "fiscal cliff" put a cap on gains.
Barclays cut its year-end target for the S&P 500 to 1,325 from 1,395, citing the government spending cuts and tax increases that will take effect early next year unless Congress acts before then.
The S&P 500 dropped 2.4 percent last week, the worst week for the benchmark index since June. The drop was partly propelled by concerns about whether there will be a timely solution to avoid the "fiscal cliff."
Though most consider it unlikely that a deal will not be reached, analysts fear going over the cliff could push the economy back into recession. There are also concerns that a protracted debate could hurt business and investment sentiment.
"It's just the uncertainty. It's going to continue to have that negative influence on any kind of small business growth or hiring or planning," said Alan Lancz, president of Alan B. Lancz & Associates Inc in Toledo, Ohio.
"You not only have it for small businesses and the like, but on the investor side, too."
Stocks traded little changed for much of the day before gaining modest strength in the early afternoon. Trading volume is expected to be light, with the U.S. bond market and government offices closed for the Veterans Day holiday.
Gilead Sciences helped pull the Nasdaq higher after the company reported over the weekend a 100 percent cure rate using a combination of drugs in a small number of patients with the most common and hardest to treat form of hepatitis C. Gilead was up 12.1 percent at $72.87.
The Dow Jones industrial average gained 37.39 points, or 0.29 percent, to 12,852.78. The Standard & Poor's 500 Index gained 4.43 points, or 0.32 percent, to 1,384.28. The Nasdaq Composite Index gained 10.65 points, or 0.37 percent, to 2,915.52.
The S&P 500 is still up about 10 percent for 2012, though recent months have eroded those gains. The Nasdaq has fallen for five straight weeks.
Some major acquisition news gave investors reason for optimism on Monday. Precision Castparts Corp offered to buy Titanium Metals Corp for $2.9 billion, while Leucadia National Corp agreed to buy investment bank Jefferies Group for $3.6 billion.
Shares of Titanium surged 42.3 percent to $16.46 while Jefferies climbed 12.3 percent to $16.03. Precision rose 5.6 percent to $180.91. In contrast, Leucadia fell 4.2 percent to $20.88.
Overseas, a report over the weekend showed China's export growth climbed to a five-month high, beating expectations and adding to recent data suggesting the country's seven straight quarters of slowing economic growth have ended.
Investors also watched the latest developments from the euro zone debt crisis. Euro zone governments will not agree to disburse more money to debt-ravaged Greece on Monday, despite the country's approving a tough 2013 budget, because there is not yet a consensus on how to make its debts sustainable into the next decade.
As a result, the region's finance ministers may have to talk again later this week.
(Editing by Kenneth Barry)