New York - US stocks rose more than 1 percent on Monday, rebounding from a steep drop in the previous week as concerns eased over the situation in Crimea, even as the region voted to join Russia.
The 97-percent vote in Crimea in favour of quitting Ukraine was condemned as illegal by Kiev and the West, with the White House calling Russian actions “dangerous and destabilising,” though the referendum passed without violence.
In addition, while markets are considered to be vulnerable to further developments in what is considered the biggest crisis between Russia and the United States since the Cold War, anticipated sanctions against Russia have yet to materialise.
The geopolitical tension weighed on equities last week, with the S&P 500 suffering its biggest weekly loss in seven and the CBOE Volatility index jumping to its highest since early February on Friday.
“This is a classic example of too much fear and anxiety having been in the market. Last week's decline more than discounted any bad news that could be reasonably expected to come out,” said Donald Selkin, chief market strategist at National Securities in New York.
“I don't think anyone believes that this could escalate into a shooting war or the US committing troops.”
The advance continued a recent trend of investors using market pullbacks as buying opportunities.
Major indexes have not undergone a sustained pullback in more than a year.
The Dow Jones industrial average was up 182.59 points, or 1.14 percent, at 16,248.26.
The Standard & Poor's 500 Index was up 19.15 points, or 1.04 percent, at 1,860.28.
The Nasdaq Composite Index was up 49.35 points, or 1.16 percent, at 4,294.75.
The US Federal Reserve's massive stimulus program has helped keep a floor under equity prices, and market participants are looking ahead to a two-day meeting of the Fed's policy-setting committee, which begins Tuesday.
The Fed is unlikely to deviate from previously announced policies, but it could use the meeting - the first with Janet Yellen as chair - to map out its plan for rate rises.
The central bank has said that the first rate rise is likely to come around the middle of next year, as long as the US economy keeps healing.
In the latest economic data, the New York Fed's “Empire State” gauge of New York manufacturing rose in March, helped by increases in new orders and inventories, though the rise was less than forecast.
Separately, industrial output rose 0.6 percent in February, a far bigger rise than had been expected.
“The data gives us another kick up, since it is another sign that we're recovering from recent weather issues,” said Selkin, who helps oversee about $3 billion in assets.
In company news, Chinese e-commerce giant Alibaba Group Holding Ltd said on Sunday it would begin the process towards a US initial public offering, ending months of speculation. Shares of Yahoo Inc, which has a 24 percent stake in the company, jumped 3.2 percent to $38.81.
JA Solar Holdings Co shares jumped 9.6 percent to $12.52 after the company posted its first profit in 10 quarters and forecast higher shipments for the year.
Intercept Pharmaceuticals Inc said on Sunday its experimental liver disease drug was effective in a third late-stage clinical trial, setting the stage for the company to file for marketing approval.
Shares fell 6.3 percent to $433.14.
Giant Investment Ltd will acquire Chinese online gaming company Giant Interactive Group Inc for $3 billion and take it private, the companies said on Sunday. Shares of Giant rose 1.8 percent to $11.60. - Reuters