U.S. stocks rally after closing down last week

U.S. stocks jumped in the morning session Monday, rebounding from heavy losses Friday, as investors continued to digest the Federal Reserve's decision to keep interest rate unchanged.

By noon, the Dow Jones Industrial Average rose 121.90 points, or 0.74 percent, to 16,506.48. The S&P 500 gained 12.83 points, or 0.66 percent, to 1,970.86. The Nasdaq Composite Index was up 27.12 points, or 0.56 percent, to 4,854.34.

According to the U.S. central bank's statement Thursday, the Federal Open Market Committee will assess both realized and expected progress toward its objective of maximum employment and 2 percent inflation in its consideration of the timing to raise the benchmark interest rate.

Wall Street suffered big losses Friday, as the Fed's decision to leave interest rates near zero triggered increasing concerns about a slowdown in global growth.

"Such is the 'hypothetical' cost of uncertainty. Today, at least is a new day," said Stephen Guilfoyle, managing director at Deep Value, Monday.

Investors will focus on the next Fed meeting slated for Oct. 27-28, as most Fed officials still expect a rate hike this year, the first in nine years. Analysts said markets might see some volatility this week.

On the economic front, U.S. total existing-home sales fell 4.8 percent to a seasonally adjusted annual rate of 5.31 million in August, following three straight months of gains, despite slowing price growth and a positive turnaround in the shares of sales to first-time buyers, said the National Association of Realtors Monday. Endit