Wall Street bounces back

US stocks rally almost 1% ahead of crucial Fed Reserve policy meeting.

United States stocks are solidly higher in early afternoon trade, rallying after last week's losses and ahead of this week's US Federal Reserve policy meeting.

At 0500 AEDT, the Dow Jones Industrial Average was up 135.21 points (0.86%) to 15,890.57 points.

The broad-based S&P 500 added 11.09 points (0.62%) to 1,786.41, while the tech-heavy Nasdaq Composite Index gained 27.09 points (0.68%) to 4,028.06.

Investors are looking ahead to a two-day meeting of the Federal Reserve's policy-making committee, which culminates in a Wednesday announcement (Thursday morning in Australia) that could scale back the Fed's huge bond-buying program.

The S&P 500 fell 1.7 per cent last week on profit taking and speculation the Fed will scale back the asset-purchase program, possibly as soon as this week.

Recent economic data suggests a strengthening US economy, but some experts predict the Fed will hold off tapering the program until early 2014.

The main economic data of note was a lift in US industrial production data to a pre-recession peak. Elsewhere, eurozone manufacturing data improved, while Chinese manufacturing growth numbers were weaker than last month.