Wall Street rebounds from last week, climbs on Fed expectations after weekly loss

By Caroline Valetkevitch

NEW YORK (Reuters) - U.S. stocks rose 1 percent on Monday as investors speculated the Federal Reserve will reaffirm its commitment to supporting the economic recovery when it meets this week.

Technology and energy shares led gains on the S&P 500, pointing to bets on a stronger economy.

Equities were supported by data that showed U.S. homebuilder sentiment jumped in June, rising to highest in seven years since the start of the housing crisis. The PHLX housing sector index <.hgx> rose 2.2 percent.

While consensus is building among policymakers that the time is approaching for the U.S. central bank to scale down its program of buying $85 billion of bonds each month, also known as quantitative easing, investors are divided over when the Fed will start to wind down the stimulus.

The U.S. central bank's Federal Open Market Committee will meet on Tuesday and Wednesday, issuing a statement at the conclusion on Wednesday, followed shortly after by a news conference by Fed Chairman Ben Bernanke.

Bernanke had said on May 22 that the Fed could reduce the pace of QE in the "next few meetings," sparking a global bond and stock selloff.

"I think that the market's positioning itself ahead of the comments that will be coming from Chairman Bernanke. I think the chairman will probably say something to the effect the Fed will use every means at its disposal to make sure the economic growth we've seen continues," said Angel Mata, managing director of listed equity trading at Stifel Nicolaus Capital Markets in Baltimore.

The Dow Jones industrial average <.dji> was up 160.20 points, or 1.06 percent, at 15,230.38. The Standard & Poor's 500 Index <.spx> was up 16.64 points, or 1.02 percent, at 1,643.37. The Nasdaq Composite Index <.ixic> was up 41.15 points, or 1.20 percent, at 3,464.71.

Major indexes closed lower on Friday for the third week of losses in the past four.

Volatility in stocks has spiked, with the Dow industrials averaging daily swings near 191 points since Bernanke's remarks. The average for 2013 before then was about 110 points.

Among rising stocks, video streaming company Netflix Inc's shares jumped 7 percent to $228.99 after it signed a multiyear deal for programming from DreamWorks Animation . DreamWorks added 4.2 percent to $23.78.

Advanced Micro Devices Inc rose 3.5 percent to $4.08 after Barron's said prospects look better for the maker of microprocessors for personal computers.

Terex Corp tumbled 9.5 percent to $28.73 after the machinery maker cut its earnings forecast.

Growth in New York state manufacturing picked back up in June, but the details of a report by the New York Fed Bank were less encouraging as new orders and employment weakened.

(The story was refiled to remove extra words in headline)

(Additional reporting by Rodrigo Campos and Alison Griswold; Editing by Theodore d'Afflisio, Nick Zieminski and Kenneth Barry)

Source: http://news.yahoo.com/stock-futures-jump-weekly-loss-fed-eyed-114835082.html

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