Last week a massive sell-off in materials and oil forced investors out of high-risk assets, and stocks ended down about 1 percent for the week.
The commodity-market slump comes at the end of a decent earnings season and as the Federal Reserve's bond-buying program also is due to end, leaving investors wondering what catalyst will fuel more stock-market gains.
"Commodities pulling back is both good and bad. It's certainly good in that oil prices have pulled back a little bit as that's one of the risks facing consumers and the economy overall, but at the same time a lot of S&P corporate profits are tied to commodities and...maybe the outlook for some sectors might be negatively impacted," said Jeff Kleintop, chief market strategist, LPL Financial in Boston.
Investors might also see increased volatility ahead, possibly keeping some on the sidelines, Kleintop said.
"The most pronounced characteristic of the market is going to be the return of volatility after two years where stocks did almost nothing but go straight up," he said. "That might keep individual investors out of the market."
Energy and materials sectors were the best performers on the S&P 500. The S&P energy index (.GSPE) was up 1.6 percent and the iShares Silver Trust exchange-traded fund (SLV.P) also gained, rising 7.3 percent to $36.98. It was the most actively traded issue on U.S. exchanges on Monday, with about 108 million shares traded.
The Dow Jones industrial average (.DJI) was up 45.94 points, or 0.36 percent, at 12,684.68. The Standard & Poor's 500 Index (.SPX) was up 6.09 points, or 0.45 percent, at 1,346.29. The Nasdaq Composite Index (.IXIC) was up 15.69 points, or 0.55 percent, at 2,843.25.
On the S&P 500, 1,340 and 1,333 are key levels that should provide strong support and entice buyers, according to Ryan Detrick, senior technical strategist at Schaeffer's Investment Research.
Despite last week's losses, the S&P 500 held above important technical levels, with the week's low just below 1,330 and Friday's close above 1,340.
In the silver ETF, "a move to $38 would be targeted," Stifel Nicolaus options market strategist Elliot Spar said in a note. "There lies the 50-day moving average and the gap from last Thursday."
Among other worries for stock investors, Standard & Poor's downgraded Greece's rating into junk territory on doubts Athens can manage its debt without imposing losses on private bondholders.
In the financial sector, Citigroup Inc (C.N), which in recent months accounted for about 6 percent of total composite volume, fell 2.3 percent to $44.16 and pressured the market after the company's 1-for-10 reverse stock split. The S&P financial sector index (.GSPF) was down 0.2 percent.
Also, a group of mortgage bond investors is reaching out for help in a novel bid to force H&R Block Inc's defunct subprime lending unit to buy back billions of dollars in soured home loans, the group's lawyer said on Monday.
Shares of H&R Block (HRB.N), best known as a tax preparer, fell 7.6 percent to $15.93 after Reuters reported the investor campaign.
About 5.76 billion shares traded on the New York Stock Exchange, NYSE Amex and Nasdaq, well below the average of 7.73 billion so far in 2011 and much lower than last week's levels, possibly reflecting the change in Citigroup volume.
Advancing stocks outnumbered declining ones on the NYSE by a ratio of about 7 to 3 and on the Nasdaq by nearly 2 to 1.
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