Wall Street opened higher Monday as strong earnings from Caterpillar offset concerns European policymakers were struggling to narrow differences in tackling the region's debt crisis.
Futures had seesawed between modest gains and losses in the early morning as policymakers deferred final decisions on a strategy to fight the region's sovereign debt crisis. They were near agreement on bank recapitalization and on how to leverage a rescue fund to try to stop bond market contagion.
The S&P 500 ended Friday with a third straight week of gains on optimism a deal could be reached at the summit.
"There is still a lot of hope that a solution out of Europe this time will last, and that is sending the market higher to break above trading ranges," said Tim Ghriskey, chief investment officer at Solaris Asset Management in Bedford Hills, New York. He added that the next support on the S&P would be around 1,270.
"But one should be cautious and skeptical here, especially with the high volatility in the market, because we don't have any guarantee that even with the solution, the debt situation will get better," Ghriskey said.
Recent gains have pushed the S&P 500 to the top of its trading range between 1,230 and 1,250, where it has struggled to advance. Many investors are looking for progress in Europe before earnings can push equities much higher. But light volume suggests investors aren't entirely convinced of the move.
Equity markets have been susceptible to rapid and violent swings in recent weeks as traders latch on to headlines out of Europe.
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