USA Today reported White House press secretary Jay Carney said President Barack Obama "would not stand in the way" of a three-month extension to the debt ceiling, which would give lawmakers more time to hash out differences on the next federal budget.
The National Association of Realtors said existing home sales dropped 1 percent November to December, but sales of previously owned homes were still elevated from a year earlier.
After an early drop of 27 points, the Dow Jones industrial average closed with a gain of 62.51 points, 0.46 percent, to 13,712.21. The Nasdaq composite index gained 8.47 points or 0.27 percent, to 3,143.18. The Standard and Poor's 500 gained 6.58 points or 0.44 percent to 1,492.56.
On the New York Stock Exchange, 2,110 stocks advanced and 930 declined on a volume of 3.5 billion shares traded.
The 10-year treasury note yielded 1.847 percent.
Against the dollar, the euro was $1.3322 from Friday's $1.3313. The dollar dropped against the yen, hitting 88.78 yen from 89.62 yen.
In Tokyo, the Nikkei 225 index lost 0.35 percent, 37.81 points, to 10,709.93.
In London, the FTSE 100 index lost 0.03 percent, 1.81 points, to 6,179.17.