The Dow Jones industrial average posted its biggest advance in eight weeks as equities extended quarterly gains amid corporate mergers and optimism that central banks will support global growth.
Exxon Mobil Corp. and JPMorgan Chase & Co. added more than 2.3 percent as oil companies and banks rallied. Catamaran Corp. jumped 24 percent after UnitedHealth Group Inc. agreed to buy it. Horizon Pharma PLC rose 15 percent after saying it will acquire Hyperion Therapeutics Inc. A Standard & Poor's index of homebuilders climbed after pending home sales in February rose more than forecast.
The Dow climbed 263.65 points, or 1.5 percent, to 17,976.31, its best gain since Feb. 3. The S&P 500 index advanced 1.2 percent to 2,086.24, headed for its longest streak of quarterly increases since 1998. With a 0.2 percent increase on Friday, the index completed its first back-to-back gain after 28 days, the longest drought since 1994. The Nasdaq composite index rose 1.2 percent.
"There was the China central bank comment about stimulus overnight, the economic news this morning was a little bit mixed, and it seems people are putting cash to work thinking maybe earnings are going to come in better than expected," Larry Peruzzi, the Boston-based director of international trading at Cabrera Capital Markets LLC, said by phone. "The biggest thing in today's market is there's no huge negative."
Federal Reserve Chair Janet Yellen said Friday that the central bank will probably raise rates this year, with subsequent increases taking place gradually, without following a predictable path. China's central bank chief said the government can do more to support growth in the world's second-largest economy.
First-quarter profits for S&P 500 companies are forecast to decline for the first time since 2009. Companies will see a contraction of 5.8 percent for the three-month period, according to economist estimates compiled by Bloomberg. Earnings growth forecasts for the quarter were positive as recently as January, the data show.