U.S. stocks climbed Monday as encouraging data on industrial activity in the U.S. and Europe and better than expected earnings from European banks HSBC Holdings and BNP Paribas gave the market a strong start to the month of August.

The Dow Jones Industrial Average jumped 208.44 points, or 1.99%, to 10674.38, marking its biggest one day point gain since July 7 and its biggest one day percentage rise since July 22.

The Dow is now at its highest closing value since May 13. All of the Dow's 30 components ended the session in positive territory, led by Alcoa, which rose 54 cents, or 4.8%, to 11.71, and Exxon Mobil, which climbed 2.26, or 3.8%, to 61.94.

The companies were boosted by gains in commodities as hopes for the global economic recovery were boosted by a round of better than expected manufacturing and construction data.

While U.S. manufacturing sector growth slowed further last month, it didn't fall as much as expected, and is still at a level that indicates growth.

Other data showed U.S. construction spending in June unexpectedly rose because of federal stimulus, while overseas, a surge in German production sent euro-zone manufacturing sector growth upward.

The Dow's financial components were also strong, with J.P. Morgan Chase up 1.36, or 3.4%, to 41.64, and Bank of America up 40 cents, or 2.9%, to 14.44, following strong earnings from European banks.

HSBC Holdings said its profit for the first half of the year doubled, topping analysts' expectations as the bank sharply reduced impairment charges and booked a gain on the value its own debt.

BNP Paribas reported a 31% jump in net profit in the second quarter, as strong retail banking operations more than compensated for the fallout from Europe's sovereign debt crisis.

American depositary shares of HSBC climbed 2.66, or 5.2%, to 53.74, while U.S. shares of BNP (Nasdaq) jumped 2.50, or 7.3%, to 36.76. HSBC and BNP are not Dow components.

The Nasdaq Composite rose 40.66, or 1.80%, to 2295.36. The Standard & Poor's 500 index added 24.26, or 2.20%, to 1125.86.

European market

European shares rallied to three-month highs Monday, buoyed by strong earnings reports from BNP Paribas and HSBC Holdings as well as well-received economic data.

The Stoxx Europe 600 index advanced 2.6% to end at 262.09, its highest closing level since April 26. Shares of HSBC Holdings, Europe's biggest bank by market capitalization, rallied 5.3% in London.

The bank's first-half net profit more than doubled to USD6.76 billion. In Paris, shares of French banking group BNP Paribas climbed 5.3% after it said second quarter net profit soared 31% to EUR2.1 billion.

Elsewhere in the sector, Societe Generale shares rose 4.7% and Credit Suisse advanced 3.6%. Greek banks were surging, with National Bank of Greece up 6.3%, helping the ASE Composite Index to jump 3.9%.

Among the major regional equities benchmarks, the French CAC-40 index rose 3% to 3,752.03, the U.K.'s FTSE 100 index climbed 2.7% to 5,397.11 and the German DAX index jumped 2.3% to 6,292.13.

Asian market

Asian stocks ended mostly higher Monday with China stocks rallying as soft Chinese manufacturing activity in July led to hopes Beijing would put growth inhibitive policies on hold.

China's Shanghai Composite Index rose 1.3% to 2,672.52 its highest close since May 24. Hong Kong's Hang Seng Index climbed 1.8%, Taiwan's Taiex rose 2.0%, and South Korea's Kospi was 1.3% higher.

Chinese shares advanced after the nation's official PMI, issued by the China Federation of Logistics and Purchasing and the National Bureau of Statistics, fell to 51.2 in July from 52.1 in June.

Separately, the HSBC China Manufacturing Purchasing Managers Index fell to 49.4 in July from 50.4 in June, dropping for the first time since March 2009 below the all important 50 point level, which separates expansion from contraction.

Mainland property developers were higher on hopes that Beijing would not introduce more tightening measures given the soft manufacturing data. Poly Real Estate advanced 2.5% and Industrial & Commercial Bank of China rose 1.4%.

In Tokyo shares were up on a combination of short covering, after the measure closed 1.6% lower Friday, and strong earnings reports from blue chip companies such as Honda Motor.

The auto maker jumped 4.0% after reporting a record Y272.49 billion in net profit for the April-June quarter on Friday, up from Y7.56 billion a year earlier. Honda also raised its fiscal full year net and operating profit outlooks.

Commodities and metals

Base metals on the London Metal Exchange surged higher Monday as strong U.S. economic data and European corporate earnings boosted investor confidence.

Copper rallied to a three month high, lead gained nearly 7% and nickel and zinc rose 4% each. Copper rose above $7,500 for the first time since April. Tin hit its highest since September 2008.

Copper has now recovered much of the ground lost during the May and June selloff. Aluminum is following suit, and so to a lesser extent are zinc, nickel and lead.

Crude futures settled above $80 a barrel for the first time since May Monday, after a wave of strong manufacturing-sector data renewed investors' faith in the global economic recovery. Light, sweet crude for August delivery settled up 3%, or $2.39, at $81.34 a barrel on the New York Mercantile Exchange, the highest settlement since May 4.

Brent crude on the ICE futures exchange was recently up $2.77, or 3.5%, at $80.95 a barrel. Oil prices surged along with other commodities and equities markets worldwide after July manufacturing indexes in the U.S., the euro zone and the U.K. all came in better than expected. The reports boosted confidence that economic growth continues, after several weeks of mixed indicators.

Similar optimism about future commodity demand caused oil prices to double in 2009, though repeated forays above $80 a barrel since October have been followed by rapid retreats.

Gold futures eked out gains Monday, supported by rallies across many commodities and a weaker dollar.

The most actively traded contract, for December delivery, rose $1.50, or 0.2%, to $1,185.40 an ounce on the Comex division of the New York Mercantile Exchange.