U.S. stocks shook off their post-election slump Monday, recording their biggest gain in more than two months. Investors appeared more optimistic about a deal to avoid a federal budget crisis and were encouraged by a pair of corporate earnings reports.

The Dow Jones industrial average closed up 207.65 points, or 1.7 percent, at 12,795.96.

The Standard & Poor's 500 index rose 27.01 points, or 2 percent, to 1,386.89.

The Nasdaq composite average gained 62.94, or 2.2 percent, to 2,916.07.

For the year:

The Dow is up 578.40 points, or 4.7 percent.

The S&P 500 is up 129.29 points, or 10.3 percent.

The Nasdaq is up 310.92 points, or 11.9 percent.