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Stocks edged up on Monday, but a batch of mixed earnings reports and weaker-than-expected existing home sales kept a damper on gains.
The Dow Jones Industrial Average was 16 points higher in early afternoon trading led by Microsoft and Hewlett-Packard.
The S&P 500 and the Nasdaq also turned higher. On Friday, the S&P 500 posted a three-day winning streak to log a new record close?its 22nd this year.
The CBOE Volatility Index (VIX), widely considered the best gauge of fear in the market, jumped above 13.
Most key S&P sectors turned higher, lifted by financials and materials.
"The Fed is done talking until next week and we're going to be subject to earnings reports and talk from Congress this week," said Brian Battle, vice president of trading at Performance Trust Capital Partners.
"We could be in a holding pattern if the market can resist a selloff, but to propel higher, we need better fundamentals?we're still running on Fed liquidity and the pullback caused by the tapering talk has been reversed in the last two weeks."
On the economic front, existing home sales in June slipped 1.2 percent in June to an annual rate of 5.08 million, according to the National Association of Realtors, missing expectations for a reading of 5.25 million units. But the reading was still the second-highest level of sales since November 2009.
Meanwhile, NAR's chief economist Lawrence Yun warned that while momentum in the housing market appears to be strong, mortgage rates will have a greater impact on sales in the coming months. He also cautioned that the continuing increase in home prices was unsustainable.
Homebuilders traded in the red following the report, with KB Home, Pulte and DR Horton leading the laggards.
Dow component McDonald's fell after the fast-food giant posted earnings and revenue that disappointed Wall Street expectations, weighed by weak sales in Europe and Asia. Yahoo also fell after the Internet company said it will repurchase 40 million shares of its common stock beneficially owned by Third Point at $29.11 a share and that three directors nominated by Third Point have submitted their resignations.
(Read More:McDonald's finance guide 'insulting' to low-wage workers)
More than 20 percent of S&P 500 companies have already reported, with 64 percent topping earnings estimates and 50 percent beating on sales, according to the latest data from Thomson Reuters. If all remaining companies post earnings in line with forecasts, earnings will be up 3.1 percent from last year's second quarter.
Nearly one third of S&P 500 companies due to report results throughout the week in addition to eight Dow components.
(Read more: Earnings growth todrive equity markets: Goldman Sachs)
European and Asian shares ticked higher, boosted by upbeat earnings and an electoral victory for Japanese Prime Minister Shinzo Abe's coalition, signaling a green light for future monetary stimulus.
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