After a one-week vacation, the bulls returned to Wall Street with force on Monday as good news on the retail and banking fronts renewed hopes for the economy and sent the Dow to its best rally in more than a month.

Today's Markets

The Dow Jones Industrial Average jumped 235.44 points, or 2.85%, to 8504.08, the S&P 500 rose 26.83 points, or 3.04%, to 909.71 and the Nasdaq Composite picked up 52.22 points, or 3.11%, to 1732.36. The consumer-friendly FOX 50 added 18.69 points, or 2.87%, to 670.71.

Fueled by optimistic guidance from Lowe's (LOW) and a slew of analyst upgrades for banks, Monday's big rebound allowed the Dow to recoup more than two-thirds of last week's losses. Additionally, the markets were buoyed by a global equities rally, led by the biggest rally in India in 17 years, and a six-month high for a gauge of home builder confidence.

“Investors took a breath over the weekend and realized there are positive factors to take their money off the sidelines and back into play,” said Jonathan Corpina, senior managing director at Meridian Equity Partners.

The markets were in the green throughout the day, ending at their best levels of the session. The rally comes after a surprise drop in retail sales sent the Dow tumbling 300 points last week, erasing a slice of its 2,000 point rally from early March.

“I am surprised how quickly we’ve bounced back. That’s good and it’s bad. I don’t think it’s healthy for the market to have these big swings either way. The positive side is that there are factors out there that” are lifting traders’ spirits, said Corpina.

Monday's rally was the biggest for the Dow since the benchmark index soared 249 points on April 9. Nearly every member of the Dow jumped more than 1% on Monday, led by Bank of America (BAC), General Motors (GM) and American Express (AXP). Telecom giants AT&T (T) and Verizon (VZ) ended flat to slightly lower.

The Nasdaq Composite saw even heavier buying than the broader market as traders snapped up tech stocks like Cisco (CSCO) and Apple (APPL). 

It's worth noting that Monday's rally wasn't backed by very strong volume, indicating a potential lack of conviction. Also, the volatility index, or so-called fear gauge, tumbled to its lowest level since September 19.

Banks, Lowe's Lift Stocks

Financial stocks were the biggest winners on Monday, soaring 6.7% after Goldman Sachs added Bank of America to its conviction buy list, pointing to BofA's ability to earn its way out of the cycle. Also, analysts at Citigroup upped their price target and earnings outlook on Goldman Sachs (GS), citing the bank’s strong capital and liquidity position and falling credit spreads.

“As the financials go, I suspect so will go the market,” NYSE trader Ted Weisberg of Seaport Securities told FOX Business. “It will be real interesting to see if the financials can regain their momentum.”

Lowe’s sparked a rally in retail and other consumer discretionary stocks after the company's quarterly results beat the Street and it announced better-than-expected earnings guidance. Lowe’s raised its full-year earnings guidance, saying it has seen consumer confidence improve and “signs of a bottom in certain markets.” 

Meanwhile, the home building sector also made big gains on Monday after an analyst at Citigroup upgraded Lennar (LEN) to "buy" from "hold," citing valuation and a recent debt issuance. The sector was further bolstered by the National Association of Home Builders' confidence survey, which climbed to its highest level since September.

In the commodity markets, crude oil enjoyed its biggest rally since April 9 and closed at fresh six-month highs. Crude closed at $59.03 per barrel, up $2.69, or 4.77%.

Corporate Movers

Wal-Mart (WMT) is revamping the electronic departments as the retailer looks to steal former Circuit City customers away from electronics leader Best Buy (BBY), The Wall Street Journal reported. Roomier and more interactive electronics displays that showcase the latest phones and computers are reportedly arriving Monday.

State Street (STT) said it plans to sell $1.5 billion in stock and notes to offset a $3.7 billion charge on asset-backed commercial paper conduits. The Boston-based bank also said it plans to sell non-FDIC backed notes in an effort to pay back its $2 billion TARP infusion.

General Motors (GM) received SEC approval to exchange $27 billion in unsecured bonds into common stock as the auto maker continues its efforts to avoid a bankruptcy filing, Dow Jones Newswires reported.

Pacific Ethanol (PEIX) said its units that own four ethanol production facilities have filed for Chapter 11 bankruptcy protection. Existing lenders have agreed to provide $20 million in DIP financing.

Boeing (BA) was upgraded by Goldman Sachs to “neutral” from “sell.” The firm also upgraded Rockwell Collins (COL) but cut Northrop Grumman (NOC), L-3 Communications (LLL) and Raytheon (RTN).

Global Markets

European stocks were up across the board as London's FTSE 100 rose 2.26% to 4446.45, France's CAC 40 rallied 2.41% to 3245.39 and Germany's DAX gained 2.42% to 4851.96. 

In Asia, Japan's Nikkei 225 dropped 2.44% to 9038.69 while Hong Kong's Hang Seng gained 1.38% to 17022.91. China's Shanghai Composite rose 0.28% to 2652.78. 

Also, India's benchmark Bombay Sensex jumped more than 17% overnight -- its largest one-day jump in 17 years -- after Prime Minister Manmohan Singh and his Congress Party won a solid majority in nationwide elections.