Stocks closed modestly higher as oil and precious metals staged a strong comeback, sending prices in energy and materials sectors higher.
The Dow Jones Industrial Average rose 45.94 points, or 0.4 percent, to close at 12,684.68, after a better-than-expected April jobs report helped stocks bounce back on Friday following four days of losses.
DuPont was among stocks leading 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 rose 6.09 points, or 0.45 percent, to close at 1,346.29, while the Nasdaq rose 15.69 points, or 0.6 percent, to close at 2,843.25. 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 6.2 percent to close at $115.90.
Gasoline futures also skyrocketed, rising more than 6 percent, as investors feared flooding could have an impact on supplies.
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 to "overweight" from "equal weight." Diamond Offshore advanced after Duncan-Williams raised the firm to "buy."
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.