U.S. stocks rose on Tuesday as an increase in mergers and acquisitions and signs of progress in securing European financial support for Greece relieved investor fears.
The pace of merger activity increased as 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 are seeing good M&A activity and this is fueling the market... there are still stocks out there with low prices and a lot of companies have a ton of money eyeing these. The flow is good, said John Canally, investment strategist at LPL Financial in Boston.
The Dow Jones industrial average <.DJI> was up 40.58 points, or 0.39 percent, at 10,444.37. The Standard & Poor's 500 Index <.SPX> was up 6.53 points, or 0.59 percent, at 1,122.24. The Nasdaq Composite Index <.IXIC> was up 12.80 points, or 0.56 percent, at 2,286.37.
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.
CF Industries Holdings Inc
Dow Chemical Co
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. The VIX <.VIX>, Wall Street's favorite gauge for investors' anxiety, dipped 2.1 percent to 18.85.
U.S. automakers were due to release February sales later. Economists in a Reuters survey expect domestic median annualized sales of 3.7 million cars and 4.2 million trucks. In January, the figures were 3.8 million cars and 4.18 million trucks.
General Motors Co
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 0.5 percent.
(Editing by Kenneth Barry)