A late-day charge landed the major averages in positive territory, closing up around 0.2% to 0.5%. European indexes fell on Monday for the first time in eight days. Japanese and Hong Kong stocks slipped as investors feared that the strong yen would dent Japanese exporters' earnings.

Stocks twisted in a narrow range Monday, recovering from steep early losses seen amid worries about a trade dispute between the U.S. and China.

Washington imposed stiff tariffs on Chinese-made tires over the weekend. China said it would launch an anti-dumping investigation into U.S. sales of chicken and auto products, according to several news outlets.

Traders reacted coolly to a speech from President Barack Obama, who warned the financial industry against the type of recklessness that led to the collapse of the brokerage Lehman Brothers Holdings Inc. one year ago, the AP said.

Major U.S. economic data isn't out until later in the week.

San Francisco Federal Reserve Bank President Janet Yellen said in a speech Monday that she expects the economic recovery in the U.S. to be "tepid" and slow, suggesting that a debilitating and sustained drop in prices poses a greater threat than runaway inflation, MarketWatch reported.

October crude ends down $0.43 at $68.86 a barrel. Natural gas jumps nearly 12%. Gold fell as the dollar traded mixed. With the China rumblings and a firmer dollar as a back-drop, copper and gold futures fell. Gold is back under $1,000.

As for active stock movers:

Goodyear (GT) benefitted from the U.S.' decision to impose special duties on Chinese tires.

Corus Bankshares (CORS) was shuttered by federal regulators over the weekend, a failure linked to commercial real estate bets.

e*Trade (ETFC) gained after Citigroup reportedly raised its rating on the issue to Buy from Hold.

Elsewhere, Sprint Nextel (S) gained amid reports that Deutsche Telekom has hired bankers to explore a multi-billion dollar offer for Sprint.

Another active-volume gainer, Salix Pharmaceuticals (SLXP) announced the successful outcome of two Phase 3, randomized, double-blind, placebo-controlled, multicenter trials, TARGET 1 and TARGET 2, designed to evaluate the efficacy and safety of rifaximin 550 mg TID in the treatment of patients with non-constipation irritable bowel syndrome (non-C IBS).