By Anora Mahmudova, MarketWatch

NEW YORK (MarketWatch) -- The U.S. stock market ended Monday with best gains in nearly a month that sent both the S&P 500 and the Dow Jones Industrial Average to record levels.

Broad-based gains on the S&P 500 were led by technology and industrial sector stocks, while deal news in the food industry boosted investor sentiment.

The S&P 500 (SPX) had the best one-day percentage gain since April 16, adding 18.17 points, or 1%, to 1,896.65. The benchmark index closed at a record level for the ninth time this year.

Four consecutive days of gains sent the Dow Jones Industrial Average (DJI) to an intraday high. The blue-chip index closed near session highs, gaining 112.13 points, or 0.7%, to 16,695.47.

The Dow Jones Transportation Average (DJT) also closed at record high, after adding 148.15 points, or 1.9%, to 7,867.45. According to the Dow Theory, when transports rally in tandem with the industrials, the broader markets are set for more gains.

The Nasdaq Composite (RIXF) gained the most in more than three months, adding 72 points, or 1.8% to 4,143.86, led by gains in momentum names.

The Russell 2000 index (RUT) added 26.43 points, or 2.4%, to 1,133.65 by the close.

Read the recap of MarketWatch's live blog of today's stock-market action.

"The fact that markets help up well in the face of weather-related weakness, geopolitical uncertainties and tapering is a sign that markets will go higher," said Jim Paulsen, chief investment officer at Wells Capital Management.

"The underlying reason for that is economic momentum. The U.S. economy is finally exiting the 2% growth and gearing up to the 3%. We may decide that the emerging markets are done slowing and global demand is going to pick up," he added.

The economic calendar was light on news Monday. The U.S. government recorded a budget surplus of $107 billion in April, the Treasury Department reported Monday, a smaller windfall than in the same month last year. The April surplus contributes to a steady decline in the deficit for fiscal 2014. Shrinking U.S. deficit could help keep interest rates low.

Pinnacle Foods soars on deal news, Twitter up on upgrade

Shares of Pinnacle Foods Inc. (PF) surged 13% after Hillshire Brands Co. said it agreed to buy the company for about $4.3 billion in a stock-and-cash deal. Shares of Hillshire Brands Co. (HSH) slid 3.2%.

Shares in Twitter Inc. (TWTR) rallied 5.9% after SunTrust analysts upgraded the stock to buy from neutral and said the company could use monetization of assets to compensate for slowing user growth.

Pandora Media, Inc. (P) shares also rallied 6%, after MKM Partners lifted its rating on the Internet radio company to buy from neutral.

Gogo Inc.'s (GOGO) shares rose 6.2% after the communication-services provider that offers wifi on airplanes reported first-quarter results that beat expectations.

21st Century Fox Inc. (NWS) shares rallied 3.1% after British Sky Broadcasting Group PLC confirmed Monday it is in preliminary discussions to buy pay-TV units from the U.S. production firm.

Asian shares rally, oil rises on Ukraine worries

Chinese shares rallied in Asia on Monday, with banks posting some of the biggest advances, in what was partly a reaction to a new market-reform blueprint announced Friday by the State Council (China's cabinet). India shares rallied on hopes the election will bring in a more business-friendly government. European stocks closed higher, with the benchmark Stoxx Europe 600 index closing at the highest level in 6 years.

Crude-oil futures (CLM4) rose after two sessions of declines on Monday on sanction concerns, while metals also advanced across the board, with gold futures adding 0.7%.

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