Equities perked up Monday as worries diminished for the moment about a widening war in the Middle East and the market welcomed better than expected McDonalds earnings. The Dow Jones industrial average gained 1.6 percent while the S&P 500 and the Nasdaq both rose 1.2 percent. US Treasury yields and the dollar rose while oil prices dropped.

Risk appetite recovered after the S&P 500 slipped into bear market territory last week. Investors liked the news that the conflagration many feared in the Middle East had not occurred, as Israel pursued incremental incursions into Gaza and other players remained relatively restrained. Oil prices fell back as the war premium diminished generally.

Other news supporting the day's upbeat trade included better than expected results from McDonalds, and news of progress in labor talks involving the big US automakers. Megacaps had a good day to boost the major averages on evident bargain hunting after weakness last week.

Among sectors, best were information technology, consumer discretionary, and communications services, plus financials. Lagging were real estate and energy.

Market Reflections track market reaction to the trading day's major events. Economic data, policymaker speeches, and company news are featured in this report as well as key indexes and financial instruments.

Understanding why markets respond as they do is fundamental for an investor. Market Reflections help explain how the day's events, news, and data impact the outlook for the economy and for market prices.