NEW YORK, Jun. 28 -- U.S. stocks rallied on Monday after major indexes suffered their seventh decline in eight weeks, as investors were betting on the passage of new austerity measures in Greece to avoid a debt default.

The blue-chip Dow jumped 108.98 points, or 0.91 percent, to end at 12,043.56, with Bank of America and Microsoft leading the gains, both up more than 3 percent at the close.

All 10 big cap sectors in the Standard & Poor's 500 gained on Monday, driving the broader index up 11.65 points, or 0.92 percent, to 1,280.10.

The tech-heavy Nasdaq Composite Index were the best performer among major indexes, rallying 35.39 points, or 1.33 percent, to 2, 688.28.

Market sentiment were lifted after local media reported on Monday that French banks had agreed to accept slower repayment of Greece's debt, giving Greece more time to deal with its more urgent financial obligations.

Meanwhile, Greek lawmakers were still arguing before a critical vote on more austerity measures in exchange for a new round of bailout money. Investors were confident that the austerity plan can survive the vote, avoiding a possible debt default.

Investors also shrugged off downbeat economic news on U.S. consumer finance.

A report from the Commerce Department showed consumer spending was flat in May as employment prospects dimmed and rising inflation caused Americans to cut back.

If adjusted for inflation, consumer spending declined 0.1 percent for the second straight month, weaker than market analysts had expected.

However, personal income rose 0.3 percent last month, in line with average estimates.

In other markets, the U.S. dollar fell against major currencies in late New York trading on Monday as optimism about the upcoming Greek parliamentary vote and disappointing U.S. consumer spending weighed on the greenback.

U.S. Crude prices also dipped after the International Energy Agency issued details of the strategic reserve release plan, which is believed to change the demand and supply situation for the moment.

Light, sweet crude for August delivery fell 55 cents, or 0.6 percent to settle at 90.61 dollars a barrel on the New York Mercantile Exchange.