Wall Street lifted by Buffett's comments

U.S. stocks pared all early losses to close higher on Monday, with the Dow Jones Industrial Average closing at a second high ever, as Warren Buffett's positive remarks on stocks outweighed concerns about the so-called sequester and a plunge in Chinese stocks as a result of harsh moves to constrain increasing house prices.

The Dow rose 38.16 points, or 0.27 percent, to 14,127.82. The Standard & Poor's 500-stock Index edged up 7.00 points, or 0.46 percent, to 1,525.20. The Nasdaq Composite Index went up 12.29 points, or 0.39 percent, to 3,182.03.

After the rally, the Dow was just 0.26 percent below its all- time high and the S&P 500 was 2.55 percent lower than its historical high, both of which were set in October 2007.

The main stock indices opened lower, following a tumble on Monday in Chinese benchmark stock index, which was hit by strict measures taken over the weekend by the Chinese government to curb property prices, including enforcing a personal income tax of 20 percent on profits from home sales.

Wall Street was also dampened by soft European stocks on Monday as political uncertainties in Italy still worried investors.

There was no deal over the weekend for a budget discussion between U.S. President Barack Obama and congressional leaders, which the market was closely watching.

The U.S. market, however, was boosted by Buffett's optimistic comments on stocks. He told CNBC on Monday that stocks were cheaper than other forms of investment.

Furthermore, Federal Reserve Vice Chairwoman Janet Yellen's defense for the Fed's quantitative easing on Monday at a conference sponsored by the National Association of Business Economists also added to positive market mood.

There is no major economic data released on Monday.

In corporate news, shares of AutoNation rallied 1.86 percent to 44.26 U.S. dollars after the largest U.S. automotive retailer announced Monday that its total retail sales of new vehicle unit in February 2013 rose 6 percent compared with the year-ago period.

Shares of Ferro, a specialty chemicals producer, soared 30.77 percent to 6.80 dollars after chemical maker A. Schulman has reportedly proposed to buy it for 563 million dollars to enhance pricing power, although Ferro opposed it.

Apple shares shed 2.42 percent to hit a fresh 52-week low after a federal judge slashed on Friday Samsung's 1.05-billion-dollar fine stemming from a patent dispute with Apple.

However, shares of Google jumped 1.90 percent to close at 821. 50 dollars, a fresh all-time high.