American stocks had their second-biggest gain of the year, helped by $17 billion in takeovers and speculation that lower borrowing costs will keep the pace of buyouts at a record.

ServiceMaster Co. surged to the highest since 2002 as the nation’s largest provider of lawn-care and landscaping services agreed to be taken private. Community Health Systems Inc. said it will buy Triad Hospital Inc. for $5.1 billion. TXU Corp., target of the biggest leveraged buyout earlier this month, rose on speculation it may get a better bid.

Options traders are starting to bet policy makers will lower interest rates to counter the effects of falling real estate prices and fuel more acquisitions as the year progresses. Federal Reserve policy makers meet this week to decide on borrowing costs.

“There’s a lot of liquidity, there’s gunpowder to buy companies and have a decent return,” a manager at Epoch Investment Partners, David Pearl, said.

The Standard & Poor’s 500 Index added 15.11, or 1.1%, to 1402.06 as all 10 of the benchmark’s industry groups advanced. The Dow Jones Industrial Average rose 115.76, or 1%, to 12,226.17. The Nasdaq Composite Index gained 21.75, or 0.9%, to 2394.41.

Stocks rebounded from last week’s losses, mirroring rallies in Europe and Asia. So far this year, $508 billion in American deals have been announced, 31% more than the $387 billion at the same time last year.