Encouraging U.S. economic data and a batch of corporate deals put investors in a buying mood Monday, sending stocks sharply higher.

The broad rally nudged the Dow Jones industrial average back into positive territory for the year after a rough stretch for the market most of last week.

Traders welcomed a government report showing that consumer spending and incomes rose in February. Another report hinted at a strong start to the spring buying season.

Energy stocks were among the biggest gainers, bucking a slide in the price of crude oil. Several drugmakers soared on merger news.

“You had all the elements today for a positive market,” said Quincy Krosby, market strategist for Prudential Financial.

The Dow rose 263.65 points, or 1.5 percent, to 17,976.31. The 30-company index was up as much as 295 points. It’s now up 0.9 percent for the year.

The Standard & Poor’s 500 index rose 25.22 points, or 1.2 percent, to 2,086.24, and the Nasdaq composite gained 56.22 points, or 1.2 percent, to 4,947.44. Both indexes are also up for the year.

Investors have their eye on economic data as they look ahead to the next round of corporate earnings, beginning next week. While a clutch of weaker-than-expected data sent the market lower much of last week, positive economic news got Monday’s rally going early.

In Europe, a survey from the European Commission showed economic sentiment across the 19-country eurozone was at its highest level since July 2011. In China, stocks soared on hopes of more economic stimulus.

In the U.S., the government said consumer spending edged up 0.1 percentage points in February after two straight monthly declines, while consumers’ incomes rose a solid 0.4 points. The National Association of Realtors reported that its index of pending home sales rose to its highest level since June 2013.

“Today’s data suggest the economy is going to be stronger in the next quarter,” Krosby said.

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