Apple led stocks indexes higher Monday after it announced regular dividends and share buy-backs, while U.S. benchmark yields hit a near-five-month high as investors sold safe-haven government bonds.
Concerns about Iran's nuclear program added $1 to U.S. crude oil prices, while the dollar slipped against the euro for a third consecutive session.
U.S. stocks had a choppy start as investors reassessed a rally that has taken the S&P 500 to levels not seen since the 2008 financial crisis. But a jump of more than 2 percent in Apple's share price fueled gains for at least one more session.
"Investors have been reluctant to put money to work for a while, but Apple is giving greater confidence for them to invest in stocks," said Rick Meckler, president of investment firm LibertyView Capital Management in New York.
At its current level, the S&P 500 stands less than 10 percent below its historic closing high of 1,565.15 set on Oct. 9, 2007.
Shares of Apple rose after the world's most valuable technology company said it will start paying a regular quarterly dividend of $2.65 a share in July and buy back up to $10 billion of its stock beginning in its next fiscal year.
The maker of the iPhone, iPad and iPod has $98 billion in cash, and investors have been wondering for months what the company would do with that money.
"It's a good story, the market was kind of expecting that. People were questioning what Apple could do with the money other than earn nothing," said Peter Kenny, managing director at Knight Capital in Jersey City, New Jersey.
"A recent string of better-than-expected macroeconomic data has boosted sentiment and fueled the market rally, but we're now at a turning point," said Roland Kaloyan, strategist, global asset allocation, at Societe Generale CIB.
"Expectations are now higher, and the risk of disappointment could trigger a correction in equities in the coming weeks," he added.
The euro erased losses against the dollar shortly after data showed the European Central Bank put its government bond buying program back into hibernation last week. It was the fourth time in five weeks that the ECB has bought nothing under the program, which was introduced in 2010.
U.S. crude oil prices for April delivery settled at $108.09, up $1.03, or 0.96 percent, on persistent worries of Iran-related supply disruptions and as the dollar weakened.
U.S. Treasuries prices fell as Wall Street stocks extended gains, driving yields to their highest levels in nearly five months.
Benchmark 10-year bonds traded 23/32 lower in price to yield 2.38 percent, up from 2.30 late on Friday. Benchmark yields were on track to close higher for the ninth consecutive session after breaking above their 200-day moving average last week.
The 30-year Treasury bond lost more than a point in price and was last trading 1-10/32 points lower in price and yielding 3.48 percent, up from 3.41 percent at Friday's close.
Reuters contributed to this report.
