Updated from 4:07 p.m. ESTAfter ending last week on a down note, U.S. equities closed higher Monday as bargain-hunters took note of a bullish equity reallocation at Lehman Brothers. The Dow Jones Industrial Average gained 193.83 points, or 2.3%, to 8627.54. The Nasdaq rose 37.99 points, or 2.8%, to 1400.41 and the S&P 500 added 20.94 points, or 2.4% to 910.42. Stocks are coming off a second consecutive losing week, with the dollar's decline and concerns about the prospects for war in Iraq blamed for sending the Dow down 2.4% and the Nasdaq down 4.2%. "Obviously there are many people out there who are looking for the Santa Claus rally after two weeks of depressed prices, hoping it's the start of the year-end rally," said Joseph Kalinowski, chief investment officer at Ehrenkrantz King Nussbaum. "But I'm bracing for a softer retail season, considering how key promotions and markdowns are right now. Margins are getting crushed." Indeed, Wal-Mart ( WMT) said its sales last week were at the low end of the range it provided for December. The discount giant still expects overall same-store sales to rise 3% to 5% for the month. Despite the bad news, Wal-Mart gained 2.8% to $51.94 -- a good indication of the bullishness of Monday's session. Unlike Wal-Mart, Best Buy ( BBY) couldn't shake off the bad news on Monday. Its stock fell 1.6% to $25.40 after SWS Securities questioned the company's ability to meet earnings targets because consumers are buying low-margin items instead of the big-ticket revenue boosters. SWS lowered its fourth-quarter earnings target to 96 cents a share, nine cents below Wall Street's consensus. As a result of the retail weakness, Kalinowski, who tracks corporate earnings, said the market faces some pitfalls ahead. "I guess I'm against the grain here. I'm not thinking year-end rally. I still think the fourth quarter is way too optimistic and we'll see another wave of corporate confessions," said Kalinowski. "The heaviest is yet to come and the bad news will go through the holidays."