US stocks advanced overnight on an uptick in corporate deal activity while the weak dollar led to gains in commodities, lifting shares of oil and mining companies.
Kraft Foods, North America's biggest food company, said it was intent on pursuing Britain's Cadbury despite the confectionary company's rejection of a $US16.7 billion Kraft bid made yesterday.
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The SPI rose slightly, up 5 points to 4538
The Australian dollar was higher at 86.23 US cents
The Reuters Jefferies CRB index climbed 2.02 per cent
Although Kraft's stock fell nearly 6 per cent, other food companies rose, including Hershey, which added 1.3 per cent to $US39.14.
"Ever since the market's big rally, a lot of folks have been concerned about valuations. But when you see a bid like this, it eases those fears," said Bruce Bittles, chief investment strategist at Robert W. Baird & Co in Nashville, Tennessee.
The dollar fell to its lowest this year against the euro, pushing oil up 4.5 per cent and gold temporarily above $1000 an ounce.
Chevron rose more than 2 per cent to $US70.48, leading the Dow higher, and Freeport-McMoRan Copper & Gold Inc gained 3 per cent to $US68.
The Dow Jones industrial average closed up 56.07 points, or 0.59 per cent, at 9497.34. The Standard & Poor's 500 Index rose 8.98 points, or 0.88 per cent, at 1025.38. The Nasdaq Composite Index gained 18.99 points, or 0.94 per cent, at 2037.77.
The Kraft bid comes after France Telecom and Deutsche Telekom announced plans to merge their British mobile units.
Last week, Walt Disney Co's said it will buy Marvel Entertainment Inc for $US4 billion, fueling hopes of a pick-up in merger activity.
The news of the rebuff sent Kraft shares down 5.9 per cent to $US26.45, but speculation about potential suitors for Cadbury buoyed the overall market sentiment.
Also in the oil sector, Exxon Mobil gained 2.1 per cent to $US70.65. The S&P index of energy companies was up 2.6 per cent.
Health insurance stocks slid 1.6 per cent before US President Barack Obama's address to Congress on Wednesday. He is expected to outline his proposed revamp of the healthcare system.
Shares of General Electric Co advanced 4.5 per cent to $US14.50 after JP Morgan Securities upgraded the stock, saying it was one of the last equities for which a little good news could still go a long way.
On the Nasdaq, shares of iPod maker Apple Inc rose 2.6 per cent to $US172.93 after Morgan Stanley raised its price target to $US200 from $US195. The Morgan Stanley also raised the US systems and PC hardware sector to "attractive" from "in line".
Volume was light on the New York Stock Exchange where 1.32 billion shares changed hands, below last year's estimated daily average of 1.49 billion.
On the Nasdaq, about 2.01 billion shares traded, also below last year's daily average of 2.28 billion.
Advancing stocks outnumbered declining ones on the NYSE by a ratio of about 22 to 7. On the Nasdaq, about 16 stocks rose for every 10 that fell.
Reuters
