U.S. stocks closed more than 1 percent higher on Monday, with the Dow breaking a 7-day losing streak, as a recovery in oil prices and a Warren Buffett acquisition boosted investor sentiment. ( Tweet This )
The Dow Jones industrial average and S&P 500 had their best day since May 8, with the latter recovering all its losses from last week's rout.
"I don't think this is anything more than just a little bounce," said Peter Boockvar, chief market analyst at The Lindsey Group. He noted some relief on the rebound in oil prices and gains in European and Chinese markets.
However, he noted that oil remains near lows. "To use commodities rallying as an excuse to buy stocks is very sketchy on a day-to-day basis," he said.
Weakness in the dollar and a refinery outage helped oil trade higher on Monday. Brent climbed above $50 a barrel, after touching a more-than-six-month low of $48.26 earlier in the session. U.S. crude settled up $1.09, or 2.48 percent, at $44.96 a barrel, after earlier falling to $43.35, a near five-month low.
Mostly disappointing data out of China initially weighed on oil prices. Chinese exports fell 8.3 percent in July, their largest decline in 4 months, while the regional producer price index fell more than expected. The Shanghai composite surged nearly 5 percent to a two-week high amid hopes of further stimulus and corporate restructuring in key sectors. The Hang Seng closed mildly lower.
Energy jumped 3.1 percent to top materials and industrials as the best performer in the S&P 500.
The Dow Jones industrial average closed about 240 points higher after rising as much as 256 points as Caterpillar and Apple led all but one blue chip higher. The index closed lower on Friday, posting its first 7-day losing streak since the summer of 2011.
Apple jumped 3.6 percent for its third-best day of the year. Caterpillar surged 3.7 percent for its second-best day of the year. Both stocks had positive coverage in Barron's over the weekend.