There was also encouraging economic news from the Federal Reserve, which reported a rebound in production at the nation’s factories, mines and utilities last month. The 0.8 percent rise in industrial production matched forecasts and was welcome following a flat reading in December.

The fairly aggressive bid for AT&T Wireless, which many thought would sell for about $30 billion, sparked a good deal of optimism on Wall Street, said Todd Clark, head of listed equity trading at Wells Fargo Securities. Some hoped the deal would inspire more spending in the telecommunications sector.

"Seeing corporations pay a premium like this for companies could lead some investors to think maybe the market’s still a bit undervalued, so we’re seeing shares drift higher," Clark said.

According to preliminary results, the Dow Jones industrial average surged 87.03, or 0.8 percent, to 10,714.88, after last week’s gain of 0.3 percent.

The Nasdaq composite index sprinted 26.79, or 1.3 percent, to 2,080.35, after falling 0.5 percent last week.

The Standard & Poor’s 500 index closed up 11.18, or 1.0 percent, at 1,156.99, following an advance of 0.3 percent.