US STOCKS-Wall St bounces back from recent losses; deals help

* M&A deal lifts sentiment; biotech coming off big weekly decline

* UnitedHealth unit to buy Catamaran; Horizon to buy Hyperion

* Indexes up: Dow 1.6 pct, S&P 1.3 pct, Nasdaq 1.1 pct (Updates to afternoon trading)

By Caroline Valetkevitch

NEW YORK, March 30 (Reuters) - U.S. stocks climbed more than 1 percent on Monday, rebounding from a sharp decline last week, helped by deal activity, especially in healthcare.

Major indexes each lost more than 2 percent last week. All ten primary S&P 500 sectors rose on the day, with S&P energy , up 1.9 percent and leading the way higher.

Also boosting investors' risk appetite, Chinese stocks surged to seven-year highs, helped by hopes for more infrastructure spending and monetary policy easing.

Among the deal news, OptumRx Corp, a unit of UnitedHealth Group, agreed to buy pharmacy benefit manager Catamaran Corp in a deal worth $12.78 billion. Shares (Berlin: DI6.BE - news) of UnitedHealth, a Dow component, rose 2.7 percent to $121.17 while U.S. shares of Catamaran added 24 percent to $60.12.

Trading could continue to be volatile ahead of earnings season, which will start in earnest in mid-April, as well as before the March payroll report on Friday. Stock markets will be closed for the Good Friday holiday, leaving investors unable to trade on the jobs data until the following week.

"I think there are still a lot of questions out there as far as the economic data and when the Fed tightens and of course earnings season," said Michael O'Rourke, chief market strategist at JonesTrading in Greenwich, Connecticut.

At 2:24 p.m., the Dow Jones industrial average rose 291.28 points, or 1.64 percent, to 18,003.94, the S&P 500 gained 26.98 points, or 1.31 percent, to 2,088 and the Nasdaq Composite added 53.74 points, or 1.1 percent, to 4,944.95.

The Nasdaq Biotech index rose 0.8 percent but remains about 5 percent below a record close earlier this month. The group has recently been under pressure, with the index down 5.2 percent last week in its biggest weekly decline in a year.

Teva Pharmaceutical said it would buy Auspex Pharmaceuticals Inc (NasdaqGM: ASPX - news) for $3.5 billion. Ireland (Other OTC: IRLD - news) 's Horizon Pharma Plc (NasdaqGS: HZNP - news) said it would acquire Hyperion Therapeutics Inc (NasdaqGS: HPTX - news) in an all-cash deal worth about $1.1 billion.

U.S. shares of Teva rose 3.1 percent to $63.88 while Auspex added 42 percent to $100.52. Horizon rose 15.5 percent to $25.23 on the Nasdaq while Hyperion rose 7.7 percent to $46.05.

Separately, Fujifilm Holdings Corp agreed to acquire U.S. biotechnology firm Cellular Dynamics International (Stuttgart: 9CD.SG - news) Inc for $307 million. Cellular shares more than doubled in heavy trading.

The deals followed reports last week of Intel Corp talks to buy Altera Corp (NasdaqGS: ALTR - news) in a deal that could top $10 billion.

Advancing issues outnumbered declining ones on the NYSE by 2,217 to 799, for a 2.77-to-1 ratio; on the Nasdaq, 1,787 issues rose and 914 fell for a 1.96-to-1 ratio favoring advancers.

The S&P 500 was posting 24 new 52-week highs and 1 new low; the Nasdaq Composite was recording 95 new highs and 41 new lows. (Editing by Chizu Nomiyama and Nick Zieminski)