* U.S. retail sales post biggest gain in 1-1/2 years
* Ukraine's acting president threatens military action
* Indexes up: Dow 0.45 pct, S&P 0.55 pct, Nasdaq 0.46 pct (Updates to morning trading, adds comment)
By Rodrigo Campos
NEW YORK, April 14 (Reuters) - U.S. stocks bounced back on Monday, following a sharp selloff last session, with earnings results from Citigroup and retail sales data lifting sentiment while traders kept tabs on the possible escalation of hostilities in Ukraine.
Financial stocks were among the largest gainers after Citi said its quarterly net profit rose as a smaller loss on its troubled assets made up for a drop in revenue and profit from its core trading and lending businesses. Citi shares added 4.4 percent to $47.69.
"This is a reflex rally, we're bouncing back probably on Citi. It's the first kind of OK news on banks we get in a couple of weeks," said Jack de Gan, chief investment officer at Harbor Advisory Corp in Portsmouth, New Hampshire.
Futures had gained earlier after data showed U.S. retail sales recorded their largest gain in 1-1/2 years in March, in the latest sign the economy was emerging from its weather-induced slumber.
"People are trying to figure out how much of the (recent data) weakness was weather related," De Gan said. "When you see pent-up spending like this it validates the idea it was because of the weather."
The Dow Jones industrial average rose 72.18 points or 0.45 percent, to 16,098.93, the S&P 500 gained 9.9 points or 0.55 percent, to 1,825.59 and the Nasdaq Composite added 18.339 points or 0.46 percent, to 4,018.073.
Ukraine's acting president threatened military action on Monday, after pro-Russian separatists occupying government buildings in eastern cities ignored an ultimatum to leave and another group attacked a police headquarters.
Russian stocks fell 1.3 percent and the rouble hit its weakest in three weeks against the U.S. dollar as Ukraine's preparedness to fight heightened fears of Russian military intervention and more Western sanctions against Moscow.
Harbor Advisory's De Gan said the market should be more concerned about a military intervention from Russia. "That would give the market reason for a further correction," he said.
On Friday, JPMorgan's disappointing earnings were partly to blame for the day's selloff. Biotech and other momentum stocks led the Nasdaq Composite lower, pushing the index below 4,000 for the first time in two months. A biotech index on Friday closed 21 percent below its record closing high hit Feb. 25, entering bear market territory.
Medtronic shares fell 1.8 percent to $58.12, paring a sharper loss in the premarket, after a court ruling that would prevent the company from selling its CoreValve system in the United States because of a patent infringement. Shares of Edwards Lifesciences, on the other side of the ruling, rallied 14.6 percent to $83.65.
Shares of Aspen Insurance Holdings jumped 14.7 percent to $45.14 after Endurance Specialty offered to buy Aspen for $3.2 billion in cash and stock. Endurance shares fell 3.1 percent to $52.14.
Lexicon Pharmaceuticals rose 6.9 percent to $1.70 after it said its experimental drug to treat diabetes met a main goal in a mid-stage study on patients with type 1 diabetes. (Reporting by Rodrigo Campos; Editing by Chizu Nomiyama and Meredith Mazzilli)