The Securities and Exchange Commission's fraud charge against Goldman Sachs (GS) is generating outrage, but it has failed to break the rally -- so far. Stocks recovered from early losses to close almost improbably higher Monday, helped by the financial sector and some better-than-expected economic data.

After getting hammered Friday, financial stocks led the market Monday, buoyed by a surprise profit from too-big-too-fail poster-child Citigroup (C). The Dow, meanwhile, was bolstered by International Business Machines (IBM), which reports after the closing bell. Still, Big Blue wasn't enough to keep the tech-heavy Nasdaq from closing ever-so-slightly in the red.

The blue-chip Dow Jones Industrial Average ($INDU) recovered from a 41-point loss early in the session to add 73 points, or 0.7%, to finish at 11,092. The broader S&P 500 ($INX) added five points, or 0.5%, to 1,198, led by stocks in the financial, health care and consumer cyclical sectors. The Nasdaq Composite ($COMPX), meanwhile, dipped one point to close at 2,480, hurt by a downgrade of Palm (PALM) and weakness in Apple (AAPL) ahead of Tuesday after-market earnings release.

A Goldman Split

As for Goldman Sachs, shares turned positive after Bloomberg News reported that the SEC split 3-2 along party lines to approve an enforcement case. Goldman rose 1.5%, or $2.48, to close at $163.18. Not incidentally, Wall Street's biggest, most powerful investment bank reports earnings tomorrow before the bell.

Also helping equities was a better-than-expected reading on leading indicators. The Index of Leading Economic Indicators rose 1.4% in March, the Conference Board said Monday -- its 12th straight monthly increase and further evidence that the U.S. economic recovery is well under way. Economists surveyed by Bloomberg News expected the index to rise 1% in March after rising 0.4% and 0.6% in February and January, respectively.

Whatever the reason for Monday's market action, it appears that cooler heads prevailed after the Dow took a triple-digit header Friday, writes John Stoltzfus, market strategist at Ticonderoga Securities.

"While some market participants are looking at Goldman's travails and its implications for the financial sector as some kind of 'bolt from the blue,' we'd suggest that the aforementioned is merely another shoe dropping from the financial crisis to be dealt with," says Stoltzfus in a note to clients.