Explosive day for the Dow

NEW YORK (CNNMoney.com) -- The Dow industrials surged 286 points Monday, posting its biggest point gain of the year, helped by financial sector strength just ahead of the Federal Reserve's policy meeting.

The Dow Jones industrial average (up 262.24 to 13,444.15, Charts) soared 286 points, or 2.16 percent, based on early tallies, rebounding from a 281 point late session selloff Friday.

The broader S&P 500 (up 31.47 to 1,464.53, Charts) gained 2.4 percent while the tech-laden Nasdaq composite index (up 31.80 to 2,543.05, Charts) climbed 1.4 percent.

Treasury prices retreated, raising the benchmark yield on the 10-year note rising to 4.75 percent from 4.69 late Friday. Bond prices and yields move in opposite directions.

Investors also kept a close eye on oil prices which were drastically lower. U.S. light crude for September delivery lost $3.42 to $72.06 a barrel. Just a week ago, oil prices reached a record trading high of $78.77.

The dollar gained against the euro and the yen.

COMEX gold for December fell $1.10 to $683.30 an ounce.

Here's what was moving before the close:

Stocks zigzagged for most of the session as credit market concerns, which had sent the 30-stock Dow industrials tumbling 280 points late last week, continued to trouble investors.

But the lack of any new woes and signs of strength in the financial sector, which helped fuel Friday's selloff, provided some positive momentum for stocks.

The KBW Bank Index (up $5.23 to $107.07, Charts) surged over 5 percent, while the AMEX Securities Broker/Dealer index (up $8.09 to $222.44, Charts) gained 3.7 percent.

Speculation that the Federal Reserve will offer some consolation to investors at its policy meeting Tuesday in light of the recent woes in the subprime, credit and housing markets, also helped prop up stock prices, said John Wilson, chief technical strategist at Morgan Keegan.

"I think with everything we've seen recently and the shifting momentum to the downside, there's hope out there that we will hear something soothing from the Fed," said Wilson.

The central bank is widely expected to leave the Fed funds rate untouched at 5.25 percent, where it has remained since August 2006.

But Wall Street will be paying particularly close attention to the accompanying statement for any clues about the central bank's outlook on interest rates and its stance on the recent woes in the credit markets.

In corporate news, just two days after Bear Stearns (up $1.81 to $110.16, Charts, Fortune 500) said it was weathering the worst financial market atmosphere in 22 years, the company announced Sunday its president and chief operating officer Warren Spector had resigned amidst the firm's recent credit problems.

Private equity firm Cerberus Capital Management named ex-Home Depot (up $0.75 to $36.94, Charts, Fortune 500) chief Robert Nardelli as Chrysler's chairman and chief executive officer. Nardelli left Home Depot in January under a cloud of shareholder disapproval.

Fast-food giant McDonald's (up $0.92 to $49.44, Charts, Fortune 500) said Monday it agreed to sell its Boston Market business to Sun Capital Partners Inc., in an effort to focus on its namesake brand.

American Home Mortgage (down $0.26 to $0.44, Charts), which closed its doors Friday, slashing nearly 7,000 jobs, filed for Chapter 11 bankruptcy protection Monday, sending shares of the battered mortgage lender 36 percent lower after last week's steep decline.

Japanese firm Fast Retailing raised its offer for the department store Barney's, a division of Jones Apparel Group (up $0.01 to $20.52, Charts, Fortune 500), to $950 million, besting a previous offer from the Dubai-based firm Istithmar.

Market breadth was negative. Losers beat winners by 6 to 5 on the New York Stock Exchange on volume of 1.71 billion shares. Decliners topped advancers by nearly 3 to 2 on the Nasdaq, on volume of 2.17 billion shares.