The benchmark 10-year Treasury was up 2/32, lowering the yield to 1.575%, while the dollar was rising 0.47%, according to the dollar index.

On the U.S. economic data front, the National Association of Home Builders Housing Market Index rose to 29 for June from a revised May reading of 28, reaching its highest since May 2007. Economists surveyed by expected a reading of 28. Still, a reading below 50 points to negative sentiment towards the housing market.

In corporate news, InterDigital ( IDCC) has reached an agreement to sell about 1,700 patents, mainly tied to 3G, LTE and 802.11 technologies, to Intel ( INTC) for $375 million. InterDigital also said it was doubling its stock buyback program to $200 million. The stock soared more than 27%.

Infinity Pharmaceuticals ( INFI) is ending the phase 2 trials of its saridegib experimental drug to treat bone and cartilage cancers, amid disappointing results. The shares lost more than 7%.

Microsoft ( MSFT) has a media event scheduled for Monday night at which the software giant could unveil a tablet computer developed in conjunction with Barnes & Noble ( BKS).

According to TechCrunch, Microsoft has a tablet/e-reader on tap and it will be entertainment-driven. Shares of Barnes and Noble dropped more than 2.5%.

PetSmart ( PETM) has raised its quarterly dividend to 16.5 cents a share from 14 cents, an increase of 18%. The company also announced a $525 million buyback plan. Shares rose 3.5%.

Facebook ( FB) said that its chief technology officer, Bret Taylor, was departing from social networking giant to work at another start-up. The stock rose nearly 5% after being in negative territory earlier in the day.

-- Written by Andrea Tse and Shanthi Bharatwaj in New York.

>To contact the writer of this article, click here: Andrea Tse.

If you liked this article you might like

Forecast for S&P 500, Dow Industrials Remains Bullish, These Charts Show

Dow 20,000! It Should Mean Nothing to Investors, but Then Again...

Tradebird Investors Are Bullish on U.S. Stocks but Bearish on the Euro

Why Home Depot and Boeing Stock Fell Tuesday