DJ improving

A stock rally gained momentum Monday following a much stronger-than-expected manufacturing report and strength on the housing front.

Stocks moved higher right out of the gate after Ford reported its first quarterly profit in more than a year.

The Dow Jones industrial average (INDU) rose 96 points, or 1%, after being up as much as 145 points earlier. The S&P 500 (SPX) jumped 9 points, or 0.9%, and the Nasdaq composite (COMP) rose 13 points, or 0.6%.

A key index of U.S. manufacturing activity reached its highest level in three and a-half years in October, according to a purchasing managers' group report released early Monday. That news, coupled with a solid reading on pending home sales, helped propel stocks sharply higher.