Stocks close near highs; Dow ends above 15000, posts best day in 2 months
Stocks kicked off the first trading day of the week with a bang, with the Dow having its best day in two months, lifted by upbeat economic data from China and despite ongoing worries over Syria.
"We've just gotten to the point where the markets are sick of worrying," said Bruce McCain, chief investment strategist at Key Private Bank. "We can obsess about the Syrian conflict or the beginning of QE tapering, but for the most part, things are looking a lot better than they have been—the economy's not going gangbusters, but the general trend has been toward some improvement."
The Dow Jones Industrial Average soared 140.62 points, or 0.94 percent, to close at 15,063.12, propelled by Caterpillar and Travelers.
The S&P 500 jumped 16.54 points, or 1 percent, to finish at 1,671.71, while the Nasdaq rallied 46.17 points, or 1.26 percent, to end at 3,706.18. The Nasdaq 100 rallied to hit its highest level since November 2000.
So far in September, the Dow has rallied more than 1.5 percent, while the S&P 500 and Nasdaq have jumped more than 2 percent each.
The CBOE Volatility Index (VIX), widely considered the best gauge of fear in the market, slid below 16.
All key S&P sectors finished higher, boosted by materials and techs.
(Read more: Mom and pop stilldon't believe in this market)
But Syria will likely remain in focus as Congress returns from its summer recess. President Barack Obama will appear in several television interviews this week as he tries to persuade members of Congress to vote for a military strike, but he faces diplomatic pressure to wait for a United Nations report due later this week before taking action. Meanwhile, U.S. Secretary of State John Kerry held a news conference on Syria with U.K. Foreign Secretary William Hague, during which Kerry said that "resolution" would not be found on a battlefield.
(Read more: Will Syria keep Larry Summers out of the Fed?)
"If strikes are approved, geopolitical tensions will rise and financial markets will almost certainly be unsettled," said HSBC Chief Economist Stephen King in a research note.
(Read more: Syria will fan flames of Sept. volatility)
"We like the Dow being above 15,000 and the S&P 500 above the 200-day moving average, but it's all on light volume and everyone waiting—the wildcard is Syria," said Alan Valdes, director of floor operations at DME Securities. "The President is speaking tomorrow."
Still, Valdes said he is encouraged to see some positive economic reports around the world, including the recent Chinese data.
Late Sunday, China reported its exports grew by 7.2 percent in August, exceeding market expectations for a gain of 6 percent, while consumer inflation held steady.
Following a week where Treasury yields zipped to two-year highs and 10-year benchmark bonds broke the psychologically important 3 percent level, this week's Treasury auctions will also be in the spotlight.
Last week, U.S.non-farm payrolls increased by 169,000 in August, undershooting consensus estimates of 180,000, which will be a key consideration for the Federal Reserve next week, when it meets to debate when to start tapering off its asset purchasing program. The tapering debate continued over the weekend, when International Monetary Fund Managing Director Christine Lagarde told CNBC that the Fed could not afford to ignore emerging markets when it weighed up future policy.
(Read more: Why tapering doesn't mean QE is going away)
Earlier, San Francisco Federal Reserve President John Williams said he would go into next week's Fed policy-setting meeting with an open mind on whether to begin cutting the pace of the Fed's $85 billion monthly bond purchases.
On the economic front, consumer credit growth rose at a 4.4 percent annual rate in July, expanding by $10.4 bullion, down from a 5-percent rate in June, according to the Federal Reserve. Analysts expected a $12.5 billion gain.
Apple rallied after FBN Securities raised its price target to $600 from $575 ahead of the tech giant's event on Tuesday where it is expected to unveil the latest versions of the iPhone—iPhone 5S and iPhone 5C. FBN said it expects the new iPhone to start shipping on Sept. 20 and sees the iPhone 5C as an opportunity for the company to be successful in China.
Yum Brands said its sales in China fell by 10 percent in August. Still, shares of the parent company of Taco Bell and KFC edged higher after it said it expects sales growth to resume in China for the current quarter. Rival McDonald's is slated to report same-store sales on Tuesday.
Molex skyrocketed more than 30 percent to lead the S&P 500 gainers after the company said it will be acquired by privately-owned energy and chemicals conglomerate Koch Industries for about $7.2 billion.
Microsoft launched its Xbox Music streaming service for free on the Internet, in the hope of drawing in more customers.
—By CNBC's JeeYeon Park (Follow JeeYeon on Twitter:
On Tap This Week:
TUESDAY: Small business optimism index, McDonald's August sales, 3-yr note auction, Intel Developer Forum, Apple event
WEDNESDAY: Mortgage applications, wholesale trade, oil inventories, 10-yr note auction; Earnings from Men's Warehouse
THURSDAY: Jobless claims, import & export sales, natural gas inventories, 30-yr bond auction, Treasury budget, Fed's balance sheet/money supply, Dell shareholder vote; Earnings from Kroger, Lululemon, Ulta Salon
FRIDAY: PPI, retail sales, consumer sentiment, business inventories, Wal-Mart holiday layaway begins
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