Stocks rose sharply Monday following news that China is dropping its informal peg of the yuan to the dollar, a move investors believe will boost Chinese demand for exports as well as commodities.
The Dow Jones Industrial Average was up, after logging its second straight up week, and in fact turned positive for the year.
Alcoa was the biggest gainer on the Dow, up about 8 percent.
Overall, multinationals were at the front of the pack after the yuan news as it boosts buying power in China.American Express, and GE rounded out the Dow's top three.
The yuan surged to its highest in five yearsMonday following the news, which also encouraged investors to snap up riskier assets.
The peg had made China the target of criticism since China’s decision to lock in 2008, as the international community felt Beijing has enjoyed an unfair trade advantage during the global credit crunch.
Oil rose more than $1 to over $78 a barrel. Gold rose to nearly $1,260 an ounce.
Some M&A news also gave investors cause for optimism: Food maker Ralcorp agreed to buy American Italian Pasta in a deal valued at about $1.2 billion. And Canadian drug maker Biovail and Valeant Pharmaceuticals have agreed to merge.
Bank stocks were higher, even after Goldman Sachs slashed its earnings forecast for the group, citing a challenging trading environment. Goldman now expects U.S. bank earnings to be down about 20 percent in the second quarter from the first.
Bank of America was up more than 1 percent. JPMorgan and Citigroup were also higher.
Walt Disney shares rose as the company’s “Toy Story 3” opened with a record $109 million in ticket sales, according to Hollywood.com Box Office.
And Dell rose following news that the computer maker is in talks to use Google's Chrome operating system on its laptops.
BP shares slipped following news that the worst-case scenario rate of oil leakage from BP’s ruptured well is approximately 100,000 barrels per day, according to an internal company document — far higher than the US government’s estimate of 60,000 barrels per day.
The oil giant also said the cost of its response to the spill had hit $2 billion and that it had paid out $105 million in damages to those affected by the disaster.
Monday’s economic data calendar includes May’s existing home sales, with the consensus forecasting a rise to an annual rate of 6.1 million homes, up from a rate of 5.77 million in April, according to economists surveyed by Briefing.com.
The rate of home sales jumped by 410,000 in April, which was the final month first-time and existing home buyers could take advantage of the government’s tax break.
The earnings calendar is light, with the latest financial results from Sonic and Steelcase expected after the close.
On Tuesday, UK Chancellor of the Exchequer George Osborne will announce how he intends to tackle his country’s bourgeoning budget deficit. Proposed revenue-enhancers include a bank levy, reforming welfare benefits and public sector pay, payroll tax breaks for new businesses, and a review of public sector pensions.
Meanwhile, Saudi Arabia is holding more than double the amount of gold as previously thought, according to new estimates that illustrate to the resurgence of the precious metal as part of emerging economies' reserves. The discovery could fuel the rally in the price of gold, which hit a nominal record high above $1,260 an ounce on Friday.
MONDAY: Feinberg speaks on executive compensation
TUESDAY: Existing-home sales; 2-yr note auction; Flash Crash hearing; 2-day FOMC meeting starts; primary runoff elections; Earnings from Walgreen and Adobe
WEDNESDAY: Weekly mortgage apps; new home sales; weekly oil inventories; 5-yr note auction; FOMC interest rate decision; Galleon hearing; Earnings from Nike and Bed Bath & Beyond
THURSDAY: Durable goods orders; weekly jobless claims; 7-yr note auction; iPhone 4 on sale; Yahoo shareholders meeting; Earnings from Lennar, Oracle and Research In Motion
FRIDAY: Final read on Q1 GDP; corporate profits; consumer sentiment; XTO shareholders meeting on Exxon buyout
More From CNBC.com: