By William L. Watts, MarketWatch

NEW YORK (MarketWatch) -- U.S. stocks rebounded Monday, taking back some of the ground lost last week in a tech-led selloff as investors cheered results from Citigroup Inc. and took comfort in a stronger-than-expected rise in March retail sales, pushing the Dow industrials to triple-digit gains.

Tech stocks took over leadership, pacing the rally heading into midday.

The Dow Jones Industrial Average (DJI) was up 127.93 points, or 0.8%, at 16,154.68 in recent trade. The S&P 500 (SPX) added 17.41 points, or 1%, to 1,833.10. Read: MarketWatch's stock market live blog.

The Nasdaq Composite (RIXF), which ended Friday with its biggest weekly percentage decline since the week ending June 1, 2012 as so-called momentum stocks across the tech sector were gutted, rebounded 49 points, or 1.2%, at 4,048.73.

The tone had been set ahead of the opening bell as stock-index futures extended gains after data showed retail sales jumped 1.1% in March, marking the biggest rise since September 2012 and topping forecasts for a gain of 0.9%. February sales were raised to show a 0.7% gain from an initial estimate of 0.3%.

(Read more: Real news in retail sales report is absence of bad news: http://www.marketwatch.com/story/real-news-in-retail-sales-report-is-absence-of-bad-news-2014-04-14.)

"Significant strength in consumer spending last month provides a strong challenge to the bearish tone of late -- not that much of the bout of selling was driven by concern for the health of the economy," said Andrew Wilkinson, chief market analyst at Interactive Brokers in Greenwich, Conn.

The data cheered investors as it offered some reassurance that soft economic data earlier this year was attributable to extreme winter weather.

"The amelioration of the chilly winter possibly had much to do with the latest reading, but the snapback in dollars spent was tremendous," Wilkinson said, in a note.

"The winter slumber is over and with confidence rising, the consumer could lead the way, if only wage gains improve," said Joel Naroff, economist at Naroff Economic Advisors in Holland, Pa.

Stocks paid scant attention to data that showed business inventories rose 0.4% in February, just shy of expectations for a 0.5% increase.

Citigroup (C) shares rose 4% after the bank's first-quarter results easily topped Wall Street forecasts. Citigroup reported a 3.5% rise in profit, boosted by lower expenses and provisions for soured loans, even as revenue fell. See: Citigroup's stock is cheap, but should you buy it?

U.S. stocks were shellacked last week, with the S&P 500 and Nasdaq both seeing their biggest weekly losses since mid-2012, while the Dow saw its biggest weekly fall since mid-March.

The relatively upbeat results from Citigroup stood in contrast to disappointing results Friday from J.P. Morgan Chase & Co. (JPM), which contributed to the Friday selloff. Analysts said earnings and, perhaps more important, sales results continue to hold the key to near-term direction, particularly in the tech sector, which has been hardest hit as investors grow worried that valuations have been stretched too far.

"Weak sales growth is nothing new, but now that the market appears to believe that valuations are looking rich, investors are starting to take notice. If companies can't beat sales expectations in an environment of low interest rates, when can they?" wrote Kathleen Brooks, research director at Forex.com in London.

"Johnson & Johnson (JNJ), Coca-Cola (KO), Bank of America (BAC) and Google (GOOG) are some of the blue-chip highlights to watch out for this week. If they follow J.P. Morgan and disappoint expectations we could see further downside in the markets" ahead of the Easter weekend, she said in a note. See: Google, Intel, IBM outlooks to trump earnings results.

On the tech front, previously hard-hit Internet and social media stocks were leading the rebound, with Google up 2.3%, Yahoo (YHOO) gaining 2.4%, Facebook (FB) up 1.3% and Twitter (TWTR) up 2.4%.

Twitter disclosed in a regulatory filing Monday that co-founders Jack Dorsey and Even Williams and Chief Executive Richard Costolo had no plans to sell any of their shares. Twitter also disclosed that Benchmark venture capital funds also told the company they have no intention to sell or distribute stock to their limited partners before or immediately after the expiration of a lockup on May 5.

Elsewhere, shares of Herbalife Ltd. (HLF) rose 9.6%. Shares had tumbled at the end of last week on news reports the company is the subject of a criminal investigation by U.S. authorities. The nutrition-supplement firm said Friday it wasn't aware of a probe.

Shares of Edwards Lifesciences Corp. (EW) rose nearly 14%. The company said late Friday it won a preliminary injunction limiting the sale of Medtronic Inc.'s (MDT) CoreValve system, which had been found by a federal jury to infringe on an Edwards patent. Medtronic shares were down 2.1%.

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