NEW YORK (CNNfn) - Technology shares surged in late trading Monday, overtaking an only slightly less robust rally for the blue-chip Dow industrials as investors set their interest-rate angst aside a day before the Federal Reserve meets to set rates.
According to preliminary data, the Dow Jones industrial average surged 103.85 points, or nearly 1 percent, to end the day at 10,656.41. Volume on the New York Stock Exchange tapered off to 626 million shares, its second-lightest so far this year, while advances outpaced declines 1,848 to 1,137.
The Nasdaq composite rose 49.34 points, or more than 1.9 percent, to 2,601.99, while the S&P 500 index gained 16.79, or 1.3 percent, to 1,332.10.
Stocks rose in concert with a rally in the beleaguered bond market, where investors covered their positions amid news of a growing U.S. budget surplus and weaker-than-expected May personal income data. The benchmark 30-year Treasury bond leapt 21/32 of a point in price, pushing the yield down to 6.09 percent.
Despite the benign economic news and ensuing bond market rebound, investors in all U.S. financial markets kept one eye firmly on the Federal Reserve, which begins a two-day meeting Tuesday to determine interest rate policy. Most investors now expect the Fed to raise the funds rate by 25 basis points, a quarter percentage point, to 5 percent, although some fears of a sharper rate increase remained.
The dollar remained mixed throughout the day, edging higher on the euro in cautious trading but retreating from the yen. 
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