European shares finished higher after German Finance Minister Wolfgang Schauble said Greece would not default , but warned that if it exited the euro zone it would be damaging for Greece as well as the whole area.
Still, strategists say Europe remains a concern, especially as Spain has yet to formally request a bailout, a step necessary to deal with its ongoing sovereign debt crisis.
"Europe has been a lot more severe than markets have anticipated, " according to Trunow. "Most of the efforts and focus have been applied to policy action, but underlying fundamental data do point to a pretty severe recession."
Also boosting sentiment, data out over the weekend showed China's consumer price inflation eased in September , while producer prices dropped from a year earlier. In addition, a separate report showed showed export growth had rebounded to nearly twice the rate expected in September.
On the earnings front, Citigroup jumped after the financial giant posted quarterly results that topped analysts' expectations .
Other major banks such as Goldman Sachs and Bank of America are scheduled to report later in the week. (Read More: Earnings Look Better So Far, but Market May Not Care)
Eli Lilly jumped after the pharmaceutical company said a potential stomach cancer treatment met goals for improved patient survival in a late-stage clinical study. In addition, Leerink Swann lifted its rating on the company to "outperform" from "market perform." Abbott Labs also rallied after positive results from a mid-stage study of hepatitis C medicines.
Texas Instruments rose after a report that Amazon is in advanced talks to acquire the supplier of semiconductors for its Kindle tablet computer, according to Israeli financial newspaper Calcalist. Other chipmakers including Sandisk and AMD also advanced.
Over the weekend, Japan's Softbank said it will acquire a 70 percent stake in Sprint for about $20 billion. Clearwire, which is largely owned by Sprint, soared more than 10 percent. Meanwhile, rivals AT&T and Verizon dipped.
—By CNBC's JeeYeon Park (Follow JeeYeon on Twitter: @JeeYeonParkCNBC)
Coming Up This Week:
TUESDAY: CPI, Treasury int'l capital, industrial production, housing market index, News Corp shareholders mtg, Target media day, 2nd Presidential Debate; Earnings from Coca-Cola, Goldman Sachs, J&J, United Health, Mattel, PNC Financial, State Street, IBM, Intel, CSX
WEDNESDAY: Weekly mortgage apps, housing starts, oil inventories; Earnings from BofA, PepsiCo, Bank of NY Mellon, Blackrock, Northern Trust, US Bancorp, AmEx, Ebay
THURSDAY: Jobless claims, Philadelphia Fed survey, leading indicators; Earnings from Morgan Stanley, Phillip Morris, Travelers, Union Pacific, Verizon, Fifth Third, Huntington Bancshares, KeyCorp, Nokia, Google, Microsoft, AMD, Capital One, Chipotle, E-Trade
FRIDAY: Existing home sales; Earnings from GE, McDonald's, Schlumberger, Honeywell, Edward Lifesciences
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