U.S. markets rallied on Monday after weak start as CIT Group reached a deal with key bondholders to avert bankruptcy and better than expected earnings combined to push stocks higher.The 30-stock Dow Jones industrial average was up 1.19 percent,up 104.21 points to 8848.15. The broad Standard & Poor's 500 index was up 10.75 points, up 1.14 percent, to 951.13.Nasdaq composite index gained 22.68 points,up 1.2 percent, to 1909.29. The retail and small business lender,CIT Group, reached a deal to receive 3 billion U.S. dollars in rescue financing from a group of bondholders.Caterpillar was biggest gainer on the Dow up 7.8 percent,Halliburton was up 4.44 percent,Hasbro Inc.'s profit rose 5 percent, beating expectations,Eaton reported a decline in second-quarter profit and also lowered its guidance for the year. FTSE 100 index ended up 1.25 percent up 54.87 points to 4443.62,Germany's DAX closed up 1.04 percent up 51.75 points to 5030.15,France's CAC 40 up 1.63 percent up 52.48 points to 3270.94. Oil prices rose 42 cents to settle at $63.98 a barrel on the New York Mercantile Exchange.Gold futures for August delivery gained $11.30, or 1.2 percent, to $948.80 an ounce on the New York Mercantile Exchange’s Comex division.Dollar was mixed on Monday.