Overall, the recent earnings reports have shown that companies aren't losing money at the rapid pace they were last fall and earlier this year. Though there are concerns that the aggressive cost-cutting measures businesses have undertaken to boost profits are not sustainable, several upbeat outlooks from companies like IntelINTC and CaterpillarCAT suggest business conditions are improving.
Still, the market is keeping a close watch on unemployment levels and consumer spending, as well as rising commodity prices and interest rates that could outpace the economy's recovery.
In other trading, the dollar and bond prices both fell. The yield on the benchmark 10-year Treasury note, which moves opposite its price, surged to 3.65% from 3.48% late Friday.
Oil, gold and other commodities rose. Commodities traders were heartened by news that manufacturing in China and Europe is expanding, a sign of support for industrial materials like copper. Copper prices, which have nearly doubled this year thanks in large part to unrelenting demand from China, hit a 10-month high.
Light, sweet crude soared $2.13 to $71.58 a barrel on the New York Mercantile Exchange.
The Russell 2000 index of smaller companies rose 9.07, or 1.6%, to 565.78.
Nearly five stocks rose for every one that fell on the New York Stock Exchange where volume came to 1.2 billion shares.
Overseas, Hong Kong's Hang Seng index rose 1.1%, while Japan's Nikkei stock average slipped 0.04%. In afternoon trading, Britain's FTSE 100 jumped 1.6%, Germany's DAX index rose 1.8%, and France's CAC-40 rose 1.5%.