NEW YORK (TheStreet) -- U.S. stocks closed higher Monday in a relief rally after the absence of military violence surrounding the weekend's Crimea vote. Domestic industrial production rebounded, pointing to ongoing improvement in the domestic economy. Yet Russia faces several sanctions from the West after the referendum in Crimea, where citizens voted to become part of Russia.

The Dow Jones Industrial Average was up 1.13% to 16,247.22 while the S&P 500 was gaining 0.96% to 1,858.83. The Nasdaq was up 0.81% to 4,279.95.

  • The Empire State manufacturing index for March came in at 5.6, up from 4.5 in February, but slightly missed the consensus estimate of 6. Confidence among homebuilders remained lackluster. The March National Association of Home Builders' housing market index rose to 47 from 46 in February, against expectations for a reading of 50.
  • On the flipside, industrial production rose 0.6% in February, the fastest monthly growth since August, and beat expectations of a 0.2% increase. "Assuming the weather returns to seasonal norms, output will rise rapidly in the coming months," Capital Economic senior U.S. economist Paul Dales told clients. "This makes it even more likely that the Fed will decide to taper its monthly asset purchases further at this week's policy meeting."
  • Other economic highlights this week include the Federal Open Market Committee policy announcement on Wednesday. The central bank is expected to continue trimming its asset purchases at the pace of $10 billion a month, given solid underlying strength in the domestic economy.
  • The referendum held in Crimea over the weekend indicated that a vast majority of Crimeans wanted to part from Ukraine and join Russia. The U.S. and Europe see the move as a breach to international law, with the EU to impose sanctions including asset freezes. Many are of the view that the tensions between the West and Russia are unlikely to escalate into military violence. For instance, "Russia and Europe are very co-dependent economically, so both have an incentive to contain the Crimean crisis," noted Ed Yardeni, New York-based chief investment strategist at Yardeni Research.
  • Stocks seeing price action included Yahoo! (YHOO), which was one of the top gainers in the S&P, up nearly 4% as Chinese e-commerce firm Alibaba kicked off the process for listing shares in the U.S. Hertz Global (HTZ) jumped 4.7% after The Financial Times reported that the company is preparing to spin off its construction equipment rental business in a deal expected to value the division at about $4.5 billion. Sears (SHLD) was up 1.82% after announcing its board approved the separation of its Lands' End business via a spinoff. Biogen (BIIB) gaining 4% after it joined the S&P 500 on Friday and acquired rights to Japan's Eisai's experimental Alzheimer's disease drugs earlier this month. And VeriSign (VRSN) shed 5.8% after analysts downgraded shares.
  • European markets were higher, with the FTSE 100 in London up 0.62% and the DAX in Germany closing up 1.37%. In Asia, the Hong Kong Hang Seng closed down 0.3% and the Nikkei 225 in Japan finished down 0.35%.

-- Written by Jane Searle and Andrea Tse in New York

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