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Stocks Bounce After Battering - CNNMoney.com -- Stocks surged Monday, starting off a new month with strong gains, as investors welcomed better-than-expected reports on personal income, manufacturing and Exxon Mobil's profit.

The Dow Jones industrial average rose 118 points, or 1.2%. The S&P 500 index gained 15 points, or 1.4%. The Nasdaq composite added 24 points, or 1.1%.

Wall Street ended one of the worst months in nearly a year Friday, with the Dow, S&P 500 and Nasdaq all closing at two-month lows. President Obama's plan to restrict trading at big banks, China's bank lending curbs and global debt worries all rattled investors.

But investors used the selloff as an opportunity to get back into stocks Monday, continuing last year's trend.

Obama Unveils $3.8 Trillion Budget -CNNMoney.com -- President Obama revealed a $3.8 trillion budget for 2011 on Monday that tries to balance two competing goals: continued government spending to boost the fragile economic recovery and controlling the nation's deficit.

They're not calling it Stimulus 2, but the Obama administration wants to extend the life of several Recovery Act provisions by building them into the federal budget.

The president's $3.8 trillion budget for fiscal 2011, unveiled Monday, calls for giving states more money for Medicaid and infrastructure projects, as well as renewing tax breaks for workers, small businesses and municipalities issuing bonds. It also requests additional funding for Obama's educational reform initiative, Race to the Top.

All these were key provisions in the $862 billion American Recovery and Reinvestment Act, a massive two-year stimulus program enacted last February. Many of its measures are set to run out this year.

Treasury Continues Losses - Treasury prices extended losses on Monday, pushing yields up, after a pair of U.S. reports showed consumer spending rose and manufacturing activity improved more than predicted, fueling optimism about the economy's recovery.

The stronger-than-expected data may support a move out of Treasury bonds and to riskier, higher-returning assets, especially as many investors expect the U.S. job market to actually add jobs in January, after losing jobs in almost every month since 2007.

Yields on 10-year Bonds rose 8 basis points to 3.66%. When Bond yields rise so do interest rates.