Stocks rose moderately, boosted by some M&A activity and an easing of hostilities in Korea, with the Dow Jones index reaching a 28-month high and the Nasdaq at a three-year high, albeit in light pre-holiday trading.

The Dow Jones Industrial Average (INDU) gained 55.03 points, or 0.48 percent, to 11.533.16. The S&P 500 index climbed 7.52 points, or 0.60 percent, to 1254.60. The Nasdaq added 18.05 points, or 0.68 percent, at 2667.61.

Adobe Systems (Nasdaq:ADBE) surged 6.01 percent on a strong earnings report.

Oil futures climbed about 44 cents to settle at $89.81 a barrel.

Gold futures eased slightly.

Bonds edged up as the yield on the 10-year U.S. Treasury slid to 3.33 percent.

European/UK indices rallied about 1 percent as a top Chinese official offered his support of measures taken by the European Union (EU) to deal with its debt crisis, although Moody’s warned that Portugal’s government bond ratings were vulnerable to a downgrade.

Asian markets rallied well more than 1 percent as chances of a confrontation between North and South Korea appears to be receding.