U.S. stocks rallied Monday, with the Dow Jones Industrial Average rising for the first time in the five trading days, as investors bought a dip after a broad-based selloff last week.
The Dow rose 75.91 points, or 0.46 percent, to 16,569.28. The S& P 500 added 13.84 points, or 0.72 percent, to 1,938.99. The Nasdaq Composite Index was up 31.25 points, or 0.72 percent, to 4,383.89.
The rebound came out after the blue-chip Dow notched its biggest weekly loss in more than six months, and the S&P 500 logged the largest weekly drop in over two years.
A combination of factors had been blamed for the correction of the bull market, including European deflationary pressure, Argentina's debt default, as well as negative sentiment, seasonality and momentum concerns on Wall Street.
However, investors seemed resuming some sorts of confidence during the day, taking the pullback as a buying opportunity, as corporate earnings continued to suggest the world's largest economy is recovering.
Michael Kors Holdings Limited reported better-than-expected profit and revenue for its fiscal first quarter. The global luxury lifestyle brand said early Monday that its total revenue in the quarter jumped 43.4 percent to 919.2 million U.S. dollars, while net income rose to 187.7 million dollars, or 91 cents per diluted share.
Shortly after the closing bell, AIG reported its earnings and revenues in the second quarter of the year, both beating analyst estimates. The giant insurer also announced an additional 2 billion-dollar stock buyback program. The company's shares went up in after-hours trading.
With no major data for release on Monday, investors are looking ahead to data on factory orders, trade deficit and the weekly jobless claims due out later in the week.
Outside the United States, Portugal will bail out the country's second largest lender, Banco Espirito Santo, with a 4.9-billion- euro (6.6 billion U.S. dollars) rescue plan and split it into a " good bank" and a "bad bank" after its shares plummeted last week, Bank of Portugal Governor Carlos Costa said late Sunday night.
The CBOE Volatility Index, often referred to as Wall Street's fear gauge, surged 11.22 percent to end at 15.12 Monday.
Crude prices rose on Monday following last week's heavy losses. Light, sweet crude for September delivery moved up 41 cents to settle at 98.29 U.S. dollars a barrel on the New York Mercantile Exchange.
Gold futures on the COMEX division of the New York Mercantile Exchange fell on Monday, with the most active gold contract for December delivery down 5.9 dollars, or 0.46 percent, to settle at 1,288.9 dollars per ounce.
The U.S. dollar traded mixed against major currencies Monday as investors were reluctant to make big bets ahead of the European Central Bank and Bank of Japan's monetary policy meetings later in the week.
In late New York trading, the euro fell to 1.3419 dollars from 1.3428 dollars in the previous session, while the dollar was little changed at 102.55 Japanese yen.