Stocks rose on Monday after Ventas Inc said it will buy Nationwide Health Properties for $5.8 billion and investor Warren Buffett said he was eyeing major acquisitions.

Comments from Buffett, chairman of Berkshire Hathaway Inc and known as a value investor, signaled he sees cheapness in the market. Berkshire's Class B shares rose 2.1 percent to $86.74.

Some of the deals start forming backstops so even if it goes down there is capital available to backstop, said Doug Roberts, chief investment strategist at Channel Capital in Shrewsbury, New Jersey.

Ventas Inc is to buy Nationwide Health Properties in a stock deal that strengthens its position as the biggest U.S. owner of senior housing. NHP shares rose 9.2 percent to $42.54.

The Nasdaq came under pressure after Inc fell 2.5 percent to $172.78 after UBS downgraded the online retailer, citing increased costs.

The Dow Jones industrial average <.DJI> gained 73.22 points, or 0.60 percent, to 12,203.67. The Standard & Poor's 500 Index <.SPX> rose 5.77 points, or 0.44 percent, to 1,325.65. The Nasdaq Composite Index <.IXIC> added 2.87 points, or 0.10 percent, to 2,783.92.

Comments from Federal Reserve officials hinting they were ready to support the economy if needed also helped as concern mounts about how the market will react when the Fed's current bond-buying program ends later this year.

New York Fed Bank President William Dudley said policymakers should be wary about withdrawing liquidity too quickly, while St. Louis Fed Bank President James Bullard would not rule out further use of the Fed's unorthodox long-term bond buying tool.

Equities had their worst performance since November last week as an uprising in Libya sent oil surging in what was seen as a potential threat to the economic recovery.

The decline allowed the market to work off some of its overbought condition after months of gains. The S&P 500's relative strength index (RSI), a measure of high to lower closes, was in moderate territory for a fifth day.

Saudi Arabia, the largest oil exporter, eased concern about higher oil prices when it reassured oil markets supply could be met as protests spread to oil producer Oman. U.S. April crude futures fell 0.6 percent to $97.35 per barrel.

Easing concerns about events abroad allowed investors to focus on the domestic economy which continues to show signs of strength.

The Institute for Supply Management-Chicago said its index of Midwest business activity rose more than forecast in February to 71.2 from 68.8 in January.

U.S. incomes rose 1.0 percent last month, the largest increase since May 2009, after increasing 0.4 percent in December. The jump in income partly reflected the tax package enacted last year.

However, underlying the continued struggles of the housing market, pending home sales fell 2.8 percent in January, a steeper decline than expected. Stocks were little impacted by the data.

(Editing by Kenneth Barry)