(By Balachander) U.S. stocks rallied, closing higher by over 2 percent, amid increasing hopes that central bankers will act to stimulate the struggling global economy.
S&P 500 Index jumped 2.30 percent to finish at 1,315.13. The Dow Jones Industrial Average gained 2.37 percent to end at 12,414.79. The Nasdaq Composite Index rose 2.40 percent to close at 2,844.72.
The U.S. economy expanded at a moderate pace, according to the Fed's Beige Book, which gathers anecdotal information on economic conditions from each of the 12 Federal Reserve districts. Manufacturing continued to expand in most districts and hiring showed signs of a modest increase, the Beige Book said.
Atlanta Fed president Dennis Lockhart said "further monetary actions to support the recovery will certainly need to be considered" if the economic outlook continued to worsen.
Federal Reserve chairman Ben Bernanke is scheduled to testify before Congress on Thursday.
The European Central Bank President Mario Draghi said that the central bank stands "ready to act" if necessary after keeping interest rates unchanged at 1 percent for a sixth straight month.
Hot Stocks Of The Day: TPX, CHK, MFRM, TUES, IRM, UNH, ACOM, MTN
In corporate news, Tempur-Pedic International Inc. (NYSE:TPX) slumped 48.73 percent after the Lexington, Kentucky-based mattresses maker issued a weak second-quarter earnings forecast and slashed its full-year guidance, citing "disappointing" sales in North America.
Mattress Firm Holding Corp. (NASDAQ:MFRM) tumbled 20.68 percent after the Houston, Texas-based company's revenue forecast for the second quarter trailed Wall Street projections.
Chesapeake Energy Corp. (NYSE:CHK) rallied 7.00 percent. The Oklahoma-based energy explorer is in discussions to sell its entire interest in Chesapeake Midstream Partners LP and other pipeline assets to Global Infrastructure Partners, Bloomberg reported, citing unnamed people familiar with the matter.
Tuesday Morning Corp. (NASDAQ: TUES) added 8.64 percent after a regulatory filing showed that Becker Drapkin Management LP owned 5.02 percent of the Dallas, Texas-based retailer of home accessories.
Iron Mountain Inc. (NYSE:IRM) soared 13.77 percent after its board approved a plan to convert it to a real estate investment trust. The Boston, Massachusetts-based provider of information management services lifted its quarterly dividend by 8 percent.
UnitedHealth Group Inc. (NYSE:UNH) added 2.96 percent after the Minnetonka, Minnesota-based health insurer boosted its dividend by 30 percent and renewed its share buy back plans.
Ancestry.com Inc. (NASDAQ:ACOM) jumped 10.74 percent. Bloomberg reported that the family-history research website is weighing a sale and the company is working with Frank Quattrone's Qatalyst Partners LLC to find buyers.
Vail Resorts Inc. (NYSE:MTN) jumped 7.43 percent. The Broomfield, Colorado-based posted 4.3 percent increase in third-quarter earnings per share amid a drop in skier visits due to weather challenges.
Hovnanian Enterprises Inc. (NYSE:HOV) rallied 18.24 percent after the Red Bank, New Jersey-based homebuilder posted surprise quarterly profit amid a 34 percent jump in revenue and improvement in gross margins.
European markets ended sharply higher, with Germany's DAX up 2.09 percent to close at 6,093.99. France's CAC40 advanced 2.42 percent to finish at 3,058.44. The U.K. FTSE 100 jumped 2.36 percent to end at 5,384.11.
Among Asian markets, the Shanghai Composite Index edged 0.10 percent lower to end at 2,309.62. Hong Kong's Hang Seng advanced 1.43 percent to close at 18,520.53. Japan's Nikkei 225 gained 1.81 percent to close at 8,533.53. India's BSE Sensex finished at 16,454.30, up 2.71 percent.
Commodity & Currency Scan:
Crude oil futures gained 1.03 percent to $85.160 per barrel, while natural gas futures fell 0.74 percent to $2.428 per million metric British thermal units. Gold futures added 0.44 percent to $1,624.0 per ounce, and silver futures rallied 3.43 percent to $29.380 per ounce.
In the currency market, the euro advanced 0.96 percent against the U.S. dollar to $1.2573. The British pound rose 0.75 percent against the greenback to 1.5499, and the dollar added 0.60 percent against the Japanese yen to 79.2200.