U.S. stocks climbed in a commodities-fueled rally on Monday after data showed the manufacturing sector expanded for a fifth straight month, lifting confidence in a global economic recovery.

Commodity prices were also lifted by a weaker U.S. dollar, as investors hesitated ahead of Friday's key non-farm payrolls report, which could further confirm a stabilizing labor market.

The Institute for Supply Management said its index of national factory activity rose to 55.9 in December, its highest level since April 2006, and above forecasts for a reading of 54.3. A reading above 50 indicates expansion.

The ISM survey followed solid readings in the commodity-hungry manufacturing sectors in China and India.

We know that manufacturing is the main catalyst for this rebound, Said Peter Boockvar, equity strategist, at Miller Tabak & Co. What's still unanswered is where is the end demand and what is the sustainability of any rebound in manufacturing.

The Dow Jones industrial average <.DJI> rose 160.06 points, or 1.53 percent, at 10,588.11. The Standard & Poor's 500 Index <.SPX> added 17.79 points, or 1.60 percent, at 1,132.89. The Nasdaq Composite Index <.IXIC> climbed 37.74 points, or 1.66 percent, at 2,306.89.

Energy and materials were the top sectors in the S&P 500. Alcoa Inc , the aluminum producer, rose 3.7 percent to $16.70, while oil and gas producer Apache Corp added 2.2 percent to $105.41.

The focus right now is on (corporate) earnings, and any number that shows us that the picture is better than expected, which this number does, is going to bring to light a positive earnings season in the next two to three weeks, said Marc Pado, U.S. market strategist at Cantor Fitzgerald & Co in San Francisco.

Both of China's PMI manufacturing surveys rose in December, with the official reading hitting its highest level in 20 months. That was echoed in India, where the manufacturing index hit a 7-month peak last month.

Oil-related companies got a boost after Deutsche Bank upgraded the U.S. refining sector, raised the ratings on several refiners, including Valero Energy Corp and Sunoco Inc .

Valero jumped 6.7 percent to $17.87, and Sunoco advanced 5.2 percent to $27.46. The PHLX Oil Service index <.OSX> climbed 3.5 percent.

U.S. crude oil futures rose 2.6 percent to $81.39 after hitting a 2-month high earlier in the session, while the U.S. dollar fell 0.5 percent against a basket of currencies. Copper hit a 16-month high.

Robert W. Baird upgraded chipmaker Intel Corp to outperform on expectations for a rebound in corporate PC spending. That helped send the Philadelphia semiconductor index <.SOXX> up by 1.8 percent.

Intel, a Dow component and a bellwether on Nasdaq, climbed 2.4 percent to $20.88.

(Reporting by Edward Krudy; editing by Jeffrey Benkoe)