Stocks extended their gains on Monday, with the S&P and Nasdaq rising 3 percent on hopes that fresh proposals may emerge out of Europe to help solve the region's debt crisis.

Retail stocks rallied after strong sales over the Thanksgiving holiday weekend, with the S&P retail index <.RLX> advancing 3.2 percent.

The Dow Jones industrial average <.DJI> was up 292.26 points, or 2.60 percent, at 11,524.04. The Standard & Poor's 500 Index <.SPX> was up 34.22 points, or 2.95 percent, at 1,192.89. The Nasdaq Composite Index <.IXIC> was up 77.07 points, or 3.16 percent, at 2,518.58.

Almost 95 percent of stocks traded on the New York Stock Exchange were in positive territory, while 90 percent of Nasdaq-listed shares rose.

(Reporting by Ryan Vlastelica; editing by Jeffrey Benkoe)