U.S. stocks surged on Monday, with the Dow and the S&P 500 bouncing back from two consecutive weekly declines, as Wall Street tried to measure what's ahead for monetary stimulus one day ahead of a two-day Federal Reserve meeting.
"Last week's sell off was a bit overdone, with the market reacting negatively to more positive data," Randy Frederick, managing director of active trading and derivatives at the Schwab Center for Financial Research, said of the 1.7 percent weekly drop on the S&P 500, its biggest weekly hit since Aug. 30.
Shares of Herbalife were briefly halted pending news, with the company announcing the completion of its re-audit for three years. Its shares resumed in rally mode.
Exxon Mobil rose after Goldman Sachs Group upgraded its rating on the oil producer's shares to buy from neutral. American International Group gained after the insurer said it would sell its plane-leasing business to AerCap Holdings. Sprint advanced after the Wall Street Journal reported the wireless carrier was considering a bid for T-Mobile US. Cirrus Logic fell after Oppenheimer downgraded shares of the audio-chip manufacturer to underperform from market perform.
"The economy is on a roll, and tapering is not a concern for the market anymore. I've been calling for the Fed to take action this month, and I think they will, but this month or January is irrelevant at this point," said Peter Cardillo, chief market economist at Rockwell Global Capital.
The Federal Open Market Committee's monetary decision is expected on Wednesday afternoon.
"I don't expect them to do it by much, they don't want to shock the markets," Cardillo added of the rate at which the Fed might begin to cut its $85 billion in monthly bond purchases.