DOW Posts Third Straight Gain

Dow 12,080.38 +76.02 +0.63%

By: JeeYeon Park
CNBC News Associate

Stocks rallied to finish higher in thin trading Monday as fears over Greece's debt crisis subsided and investors snapped up beaten-down stocks.

The Dow Jones Industrial Average gained 76.02 points, or 0.63 percent, to close at 12080.38, led by DuPont [DD 50.39 0.82 (+1.65%) ] and Caterpillar [CAT 98.18 2.23 (+2.32%) ]. But the blue-chip index is still on track for the worst month since last August.

The S&P 500 6.86 points, or 0.54 percent, to end at 1,278.36.

The tech-heavy Nasdaq climbed 13.18 points, or 0.50 percent, to finish at 2629.66.

Despite the day's rally, however, stocks are still on pace for the first losing quarter since the second quarter of 2010.

The CBOE Volatility Index, widely considered the best gauge of fear in the market, tumbled to end near 20.

Volume was light with the consolidated tape of the NYSE at 2.97 billion shares, while just 786 million shares changed hands on the floor.

“There will be more market participation when there’s confidence,” said Brian Battle, vice president of trading at Performance Trust Capital Partners, citing concerns over jobs, housing and the growing U.S. debt.

The euro zone finance ministers gave Greece a two-week deadline to approve tighter austerity measures in return for more emergency loans.

"The approval of the Greek parliament is absolutely essential and it will have to arrive in a timely fashion so we can take a decision on July 3,'' said Jean-Claude Juncker, head of the EU finance ministers.

Meanwhile, Moody's placed ratings of Italian Government-related issuers on review for a possible downgrade. The news comes after the firm said Friday it could downgrade Italy's rating.