Stocks sharply higher after biggest jump in retail sales since 2012

U.S. stocks advanced Monday, after the Nasdaq Composite briefly detoured into negative terrain, as investors embraced data that had U.S. retail sales jumping the most since 2012 while tracking tensions in Ukraine.

"We're hopeful that today's upward price action is not confined, but we're also cognizant of continued unrest in that geography," Jim Russell, senior equity strategist for US Bank Wealth Management, said of Ukraine, where pro-Russian separatists reportedly disregarded an order to depart government building in eastern parts of the country as government troops did not follow up on a threatened offensive.

"The markets are watching; it's borderline unforecastable," Russell added.

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"Whenever you have geopolitics in play, it can push valuations and fundamentals to the rear. Ukraine has jumped into the mix; there really isn't a legitimate way to protect yourself against it," said Sandy Lincoln, chief market strategist at BMO Asset Management US.

Benchmark indexes ended near session highs after scaling back on their gains late in the session.

Stocks initially rallied after figures from the Commerce Department had retail sales climbing 1.1 percent in March, furthering the notion that the U.S. economy is recovering after harsh weather curbed spending at the beginning of the year.

"The last two days were pretty big down days, so the markets were ripe for a bounce. But the retail numbers were pretty good; the effects of the cold weather are finally going away," said Randy Frederick, managing director of active trading and derivatives at Charles Schwab.

"There's a strong case to be made that we started first quarter on a weak note and ended it on a strong note," said Stuart Hoffman, chief economist at PNC Wealth Management.

Citigroup's earnings lifted its shares and the financial sector, with Bank of America also gaining.

S&P 500

After a 158-point climb, the Dow Jones Industrial Average rose 146.49 points, or 0.9 percent, to 16,173.24, with Visa leading gains after Robert W. Baird upgraded the Dow component and card-transaction processor to outperform from neutral.

The S&P 500 added 14.92 points, or 0.8 percent, to 1,830.61, with energy and technology pacing sector gains and health care the poorest performing, with Intuitive Surgical leading declines on the index.

After erasing a 1.3 percent gain, the Nasdaq retrieved its positive footing, up 22.96 points, or 0.6 percent, to 4,022.69.

The iShares Nasdaq Biotechnology ETF declined, along with many of the momentum stocks hit last week, with Tesla Motors among those weighing on the technology sector and also helping pull the Nasdaq briefly into the red.

After a 22 percent rise last week, the CBOE Volatility Index, a measure of investor uncertainty, on Monday fell 4.6 percent to 16.25.

"The lack of an extreme spike in the VIX tells me there is not much panic out there. We are still in a very solid, fundamentally sound market," said Frederick at Charles Schwab.

Advancers outpaded decliners by a 2-to-1 ratio on the New York Stock Exchange, where 691 million shares. Composite volume approached 3.1 billion.

The dollar gained against the currencies of major U.S. trading partners and 10-year Treasury yield used in figuring mortgage rates and other consumer loans added 2 basis points to 2.645 percent.

"The weaker euro is helping to lift European markets off their lows, and Citi, which reported a better number is up. I think that's the combination for the lift in the markets," said Peter Boockvar, chief market strategist at the Lindsey Group.

Gold for June delivery rose $8.50, or 0.7 percent, to $1,327.50 an ounce and crude oil for May delivery rose 31 cents, or 0.3 percent, to $104.05 a barrel.

Monday's data also had U.S. business inventories climbing 0.4 percent in February versus a 0.5 percent estimate.

On Friday, stocks fell sharply, with the Nasdaq Composite recording its first close under 4,000 since February.

—By CNBC's Kate Gibson

Coming Up This Week:


2:00 p.m.: Fed Gov. Daniel Tarullo


Earnings: Coca-Cola, Johnson and Johnson, Intel, Yahoo, CSX, Charles Schwab, Comerica, Northern Trust, Pep Boys, Infosys, Adtran, Interactive Brokers

8:30 a.m.: CPI

8:30 a.m.: Empire state survey

8:30 a.m.: Atlanta Fed President Dennis Lockhart

8:45 a.m.: Fed Chair Janet Yellen opening remarks at Atlanta Fed conference

9:00 a.m.: TIC data

10:00 a.m.: NAHB survey

3:00 p.m.: Philadelphia Fed President Charles Plosser, panel at Atlanta Fed conference

4:00 p.m.: Boston Fed President Eric Rosengren

8:00 p.m.: Minneapolis Fed President Narayana Kocherlakota


Earnings: Google, Bank of America, IBM, American Express, PNC Financial, Capital One, Credit Suisse, US Bancorp, Huntington Bancshares, SLM, SanDisk, Steel Dynamics, Abbott Labs, St. Jude Medical, Noble, Burberry, Kansas City Southern

7:00 a.m.: Mortgage applications

8:30 a.m.: Housing starts

8:30 a.m.: Fed Gov. Jerome Stein

9:15 am Industrial production

11:30 a.m.: Atlanta Fed's Lockhart

12:25 p.m.: Fed Chair Janet Yellen at Economic Club of NY, Q&A

1:25 p.m.: Dallas Fed President Richard Fisher

2:00 p.m.: Beige book


Earnings: General Electric, BlackRock, Goldman Sachs, Morgan Stanley, Blackstone, DuPont, Union Pacific, Pepsico, Chipotle, Baker Hughes, Sherwin-Williams, Fifth Third, AutoNation, Sonoco Products, Snap-on Mattel, Cypress Semiconductor, Baxter, Taiwan Semiconductor, Rockwell Collins

8:30 a.m.: Jobless claims

10:00 a.m.: Philadelphia Fed survey


Markets closed for Good Friday

10:00 a.m.: Leading indicators

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