The dollar weakened against a basket of currencies in thin trading. The euro strengthened on apparent short covering following an inconclusive election result in Spain that may increase worries over the country's financial stability.
Wall Street started the abbreviated Christmas holiday week on a positive note, and buying accelerated in the late afternoon following a down week for the three major U.S. indexes. [.N]
"You're seeing some end-of-year bargain hunting here," said Rick Meckler, president of LibertyView Capital Management in Jersey City, New Jersey, adding that financial stocks may seem cheap as banks stand to benefit from rising interest rates. The Federal Reserve last week announced its first rate hike in nearly a decade.
Investors may also feel better about the holiday shopping season after observing weekend shopping, Meckler said.
Even so, some investors were losing hope for the typical end-of year rally that turns stocks positive for December.
"Maybe some believe you're going to see a Santa Clause rally but that window is closing awful fast," said Robert Pavlik, chief market strategist at Boston Private Wealth in New York.
The Dow Jones industrial average <.DJI> rose 123.07 points, or 0.72 percent, to 17,251.62, the S&P 500 <.SPX> gained 15.6 points, or 0.78 percent, to 2,021.15, and the Nasdaq Composite <.IXIC> added 45.84 points, or 0.93 percent, to 4,968.92.
The Dow and the S&P 500 ended last week with their biggest two-day percentage losses since Sept. 1.
"We'd like to see crude bottom and start to work higher to support economic growth and earnings growth, but we're not there yet because we've got this supply-demand imbalance," said Phil Orlando, chief equity market strategist, at Federated Investors, in New York.
The MSCI all-world stock index <.MIWD00000PUS> was up 0.3 percent. Europe's <.FTEU3> index of major companies closed down 1.2 percent, weighed by Spain and the euro.
Spain's Ibex share index <.IBEX> fell 3.6 percent to its lowest level since Sept. 29 after the Popular Party won more seats than any other party but fell well short of a majority. Left-wing parties also failed to win a clear mandate to govern, and talks to form a coalition government could drag on for weeks.
The dollar fell 0.3 percent against a basket of major currencies <.DXY>, and the euro
U.S. long-dated Treasury yields edged higher on Monday after U.S. crude oil prices stabilized somewhat, leading to a marginal rise in inflation expectations, while other Treasury yields were little changed on caution ahead of year-end.
Benchmark 10-year U.S. Treasury notes
Gold rebounded after last week's slide following the Fed's rate hike rose 1 percent at $1,077.88 an ounce
We're sorry, this article is unavailable at the moment. If you wish to read this article, kindly contact our Customer Service team at 1-300-88-7827. Thank you for your patience - we're bringing you a new and improved experience soon!