US stocks surge ahead of Federal Reserve meeting

NEW YORK (AFP) - US stocks ploughed higher Monday as the dollar retreated and the market looked ahead to a Federal Reserve policy decision in the next two days.

The Dow Jones Industrial Average bolted up 228.11 points (1.29 per cent) to 17,977.42.

The broad-based S&P 500 jumped 27.79 (1.35 per cent) to 2,081.19, while the tech-rich Nasdaq Composite Index gained 57.75 (1.19 per cent) to 4,929.51.

The dollar's recent gains have raised worries about the drag on US multinationals, but on Monday the euro rose slightly against the greenback, to US$1.0590 (S$1.46) from US$1.0489 Friday.

Mr Chris Low, chief economist at FTN Financial, said data showing tepid growth of just 0.1 per cent in US industrial production in February likely lifted confidence the Fed would take a cautious approach to raising near-zero interest rates, probably deciding to hike them later rather than sooner.

The Fed's two-day monetary policy meeting begins Tuesday.

Valeant Pharmaceuticals International rose 2.5 per cent after lifting its offer for Salix Pharmaceuticals from US$158 per share to US$173 per share, pushing out rival bidder Endo International. Salix gained 2.0 per cent, while Endo rose 2.7 per cent.

Biotech company Amgen jumped 5.7 per cent as it released promising clinical research for its Repatha medication for lowering cholesterol. Other pharma companies also rose, including Celgene (+2.6 per cent) and Gilead Sciences (+1.7 per cent).

Dow component Procter & Gamble jumped 2.1 percent on a report that it is considering the sale or initial public offering of some beauty brands.

Dow component DuPont dropped 4.3 per cent following a downgrade by Bank of America Merrill Lynch.

Bond prices rose. The yield on the 10-year US Treasury fell to 2.08 per cent from 2.12 per cent Friday, while the 30-year slid to 2.65 per cent from 2.70 per cent. Bond prices and yields move inversely.