Stocks kicked off August with a rally, finishing at their highest level in 10 weeks, after a better-than-expected manufacturing reading and some strong bank earnings out of Europe.
The Dow Jones Industrial Average gained 208.44, or 2 percent, to close at 10,674.38. All 30 Dow components finished higher.
The S&P 500 gained 2.2 percent, while the Nasdaqclimbed 1.8 percent. The CBOE volatility index, widely considered the best gauge of fear in the market, was below 22 at the closing bell.
This came after Wall Street wrapped up its best month in a year Friday after the earnings season rounded the final turn with a group of strong results that offset the impact of poor economic data.
Energy and materials led the way today, as the dollar fell, sending oil prices to their highest close in three months. Alcoa and ExxonMobil were the top gainers on the Dow.
Some market pros said energy stocks were also helped by the fact that they were overly beaten down during the BP oil spill.
BP shares rose 2.5 percent amid expectations that the company could start plugging its broken deep-sea oil well in the Gulf of Mexico on Monday night, more than three months after its rupture led to the worst offshore oil spill in U.S. history.
Bank of America rose nearly 3 percent as banks got a boost after Europe's biggest bank, HSBC, beat earnings expectations as did France's largest bank, BNP Paribas. Both banks reported lower provisions for bad debt — HSBC went so far as to say it saw its lowest level of bad debt since the beginning of the financial crisis during the quarter.
Coca-Cola advanced 2.4 percent after JPMorgan upgraded the stock to "overweight" from "neutral," citing strength in emerging markets and expectations of improvement in developed markets. An article in Barron's suggested the stock could rise 10 percent or more in the next year after the company cited North America as a growth market.
Fordshares gained 3.1 percent following news that the auto maker has completed the sale of its Volvo unitto China's Geely for $1.8 billion, capping China's biggest purchase of a foreign car maker.
Auto makers were mostly higher ahead of July sales results from the sector, due out on Tuesday. Analysts expect to see a 2.8-percent increasein auto sales from June.