Stocks held firm gains in the final hour of trading on Monday as a rebound in oil and precious metals pushed energy and materials sectors higher.
The Dow Jones Industrial Average rose more than 45 points after a better-than-expected April jobs report helped stocks bounce back on Friday following four days of losses.
DuPont led the blue-chip average higher despite news that an activist investor raised its stake in Danisco, which would jeopardize DuPont's bid for the Danish company.
TheS&P 500 and the Nasdaq also rose. The CBOE Volatility Index, widely considered the best gauge of fear in the market, sank to nearly 17.
Among key S&P 500 sectors, energy and materials gained, while financials fell.
"It's all due to the rebound in precious metals and energy," said Peter Cardillo, chief market economist at Avalon Partners.
News before the market opened that Standard & Poor's was downgrading Greece to near-junk status sent the dollar higher, and pressured stocks. But that sentiment reversed around mid-morning, and the dollar traded lower against a basket of currencies by afternoon.
Commodities strengthened because "geopolitical concerns are still very much in place," Cardillo said. "There’s no signs of the global economy weakening where we’d see demand slack off..and so I think the fact precious metals had gotten ahead of themselves, and wound up in more speculative hands, is basically what caused the reversal."
Oil prices reboundedas U.S. light crude rose 5.53 percent to close at $102.55 a barrel, while in London, Brent crude climbed more than 6 percent to close at $115.84.
More than 90 percent of all energy stocks gained as oil recovered, including shares of Baker Hughes , which also benefited from an upgrade by Barclays the firm to "overweight" from "equal weight." Diamond Offshore advanced after Duncan-Williams raised the firm to "buy."
The uptick in oil prices hit airline stocks hard, as usual, as AMR , US Airways , and Delta Air Lines , among others, all declined.
Precious metals also bounced up, with silver gaining 5.2 percent on Monday to close at $37.11 an ounce, while gold closed up about 0.8 percent to 1 percent.
Citigroup slumped after the financial giant began trading at around $45 a share after a 1-for-10 reverse split. Citi shares traded at about $4.50 Friday.
Meanwhile, shares of AIG sank to the lowest level in nearly eight months as the government prepares to sell more shares of the bailed-out insurer to the public. At current levels, the government may not break even on the sale, as the U.S. Treasury would need to make as much as $28.72 a share.
Mosaic gained after news the fertilizer company would launch a $7 billion stock offering into the secondary market, CNBC reported.