U.S. stocks rose the most in a week on Monday, in anticipation of better-than-estimated earnings while oil retreated from record highs, and a late afternoon report that Hewlett-Packard Co. is near a deal to buy Electronic Data Systems Corp. for as much as $13 billion.

The S&P 500 Index added 15.3 points, or 1.1 percent, to 1,403.58. The Dow Jones Industrial Average increased 130.43, or 1 percent, to 12,876.31. The Nasdaq Composite Index rose 42.97, or 1.8 percent, to 2,488.49.

The Nasdaq Composite helped the broader market advance, with tech stocks following the lead of BlackBerry maker Research in Motion which soared 6.9 percent to an all-time high on the release of its 3G BlackBerry Bold device. Apple gained 2.6 percent saying its online store had run out of iPhones, which fueled speculation that a new improved iPhone is due out soon.

Hewlett-Packard dropped 4.7 percent, in the wake of an afternoon report by the Wall Street Journal that the technology giant could unveil as early as Tuesday an agreement to acquire EDS.

Retail stocks, such as Macy's and JC Penney posted big gains as crude oil prices slumped on the New York Mercantile Exchange.

Crude oil finished at $124.23 a barrel, down $1.73 for the session.