US open: Dow jumps 250 points on the back of comments from Yellen and China

US stocks rallied on Monday, with investors buoyed by comments from People’s Bank Of China governor Zhou Xiaochuan and Federal Reserve chairwoman Janet Yellen.

Just after 14:54 the Dow Jones Industrial Average was up 250 points, while the S&P 500 and the Nasdaq gained five and 28 points, respectively.

Asian markets rallied overnight on hints by the Chinese central bank of more stimulus measures, with Xiaochuan opening the door to further monetary loosening as deflation risks grow.

Xiaochuan’s words followed dovish comments from Yellen on Friday, who once again stressed the need for a slow implementation of rate hikes.

The Fed chairwoman said the central bank would be “uncomfortable” hiking rates if consumer prices, wage growth and other measures of underlying inflation were to weaken.

“Wage growth, spending and inflation are the bigger concern of the Fed right now and the core personal consumption expenditure price index is the Fed’s preferred inflation measure,” said Craig Erlam, senior market analyst at Oanda.

Personal incomes in the US grew slightly more quickly than expected last month, but gains in spending failed to meet analysts’ forecasts.

Consumer expenditures grew by 0.1% month-on-month, according to the Bureau of Economic Analysis, while incomes grew 0.4% month-on-month in February, in line with analysts’ expectations.

In company news, Auspex Pharmaceuticals jumped 41.7% after it had agreed to a $3.2bn takeover offer from sector peer Teva Pharmaceutical Industries.

Pharmacy-benefit manager group Catamaran Corp surged 24.6% after confirming it had accepted a takeover bid, worth approximately $12.8bn, from UnitedHealth Group, which rose over 4.3%.

Shell eggs manufacturer and distributor Cal-Maine Foods slid 0.18% despite reporting that sales climbed 11% in the third quarter on the back of increased demand over the holiday period.

Oracle shares received a boost out of analysts from RBC to outperform from sector perform.

After tumbling on Friday, oil prices were largely stable, with West Texas Intermediate edging forward 0.25% to $48.99 a barrel, while Brent crude slid 0.05% to $56.38 a barrel.

The dollar rose over 0.50% against the yen and the pound and gained 0.29% against the euro, while gold futures slid 1.49% to $1,182.80.