Stocks gained on Tuesday as an increase in mergers and acquisitions and signs of progress in securing European financial backing for Greece eased investor fears.
Adding to optimism, fertilizer maker CF Industries raised its hostile bid for Terra Industries Inc, while Dow Chemical said it will sell one of its units that make latex, rubber and related plastics to private equity firm Bain Capital Partners.
We've been seeing some big M&A deals yesterday and today, and the market certainly loves this. It shows that companies, not just average investors, are finding value in the market place, said Scott Marcouiller, senior equity market strategist at Wells Fargo Advisors in St. Louis.
The Dow Jones industrial average <.DJI> was up 27.66 points, or 0.27 percent, at 10,431.45. The Standard & Poor's 500 Index <.SPX> was up 4.91 points, or 0.44 percent, at 1,120.62. The Nasdaq Composite Index <.IXIC> was up 10.04 points, or 0.44 percent, at 2,283.61.
Greece's borrowing costs fell to their lowest level in weeks amid expectations the government will announce new austerity measures to win European debt guarantees for the cash-strapped European Union member.
The Chicago Board Options Exchange Volatility Index <.VIX>, Wall Street's favorite measure of investor anxiety, fell more than 3 percent to 18.67.
The faster the EU takes control of this, the faster the EU contains this, the market will like it. Investors are scared that this might be just the tip of an iceberg that they certainly don't want to see, Marcouiller said.
CF Industries Holdings Inc
Dow Chemical Co
Wall Street ended higher for a second straight day on Monday, boosted by AIG's
Tuesday's advance pushed the Dow index into positive territory for 2010, a day after both the S&P 500 and Nasdaq moved above the break-even mark for the year.
In auto sales for February, Ford Motor Co
General Motors Co
On the Nasdaq, technology bellwether Qualcomm Inc
Shares of Sequenom Inc
UBS raised its 2010 estimate for global semiconductor company revenue growth, saying the first quarter appeared to be tracking ahead of seasonal trends with strong personal computer sales that should continue to support demand for DRAM microchips.
The PHLX Semiconductor index <.SOXX> rose 0.8 percent.
(Editing by Kenneth Barry)