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Janet Yellen

Stocks: Dow up 264, back in the black for '15

David Carrig
USA TODAY
Traders work on the floor of the New York Stock Exchange.

Stocks rallied Monday to kick off the week on a positive note as markets got a boost from several health care deals, encouraging economic data and comments from Federal Reserve Chair Janet Yellen.

The Dow Jones industrial average ended up 263.65 points, or 1.5%, to 17,976.31, putting the blue-chip index back into positive territory for the year.

The Standard & Poor's 500 index jumped 25.22, or 1.2%, to 2086.24 and the Nasdaq composite index gained 56.22, or 1.2%. to 4947.44.

The rally was broad-based with all 10 of the S&P sectors rising.

In a speech in San Francisco Friday, Yellen said the central bank will raise interest rates only gradually because of persistent slack in the labor market, the risks of another economic downturn and vestiges of the Great Recession.

She said that although the Fed doesn't need inflation to pick up before raising its benchmark rate, a further significant weakening of inflation or wage growth would make her "uncomfortable" with a rate hike. The comments eased fears that the Fed would hike rates sooner than Wall Street has been anticipating.

A batch of mergers and acquisitions announced Monday in the health care sector that primarily centered around the pharmaceutical industry also gave the markets a lift:

• Shares of UnitedHealth Group (UNH) jumped 2.5% and helped boost the Dow after announcing that it was buying the drug benefits manager Catamaran for $12.8 billion. Catamaran (CTRX) surged 24%.

• Drugmaker Teva Pharmaceutical (TEVA) agreed to buy Auspex Pharmaceuticals (ASPX) for about $3.2 billion deal. Teva's stock was up 0.9% and Auspex jumped 41%.

•Horizon Pharma (HZNP) is buying Hyperion Therapeutics (HPTX) in a pharmaceutical merger worth about $1.1 billion. Shares of Horizon jumped 18% and Hyperion gained more than 7.5%.

In economic news:

• In an encouraging sign for the housing market's spring buying season, the National Association of Realtors said its pending home sales index jumped 3.1% to 106.9 in February, the highest reading since June 2013.

• Consumer spending rose a modest 0.1% in February but that was up after two months of declines. Personal incomes rose 0.4%.

STOCKS:Live markets blog

Asian markets were higher as China's Shanghai Composite soared 2.6% on hopes of additional economic stimulus. Japan's Nikkei 225 index gained 0.7% and Hong Kong's Hang Seng index surged 1.5%.

European shares were also higher as Britain's FTSE 100 index rose 0.5% and Germany's DAX index jumped 1.8%.

Stocks got a boost in late trading Friday and closed higher, breaking a 4-day losing streak.The Dow rose 34.43 to 17,712.66 and the S&P 500 gained 4.87 to 2061.02.

Contributing: USA TODAY's Paul Davidson

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