Investing.com - U.S. stocks rose on Tuesday in wake of news of a major pharmaceutical merger, while upbeat European economic sentiment also boosted broader U.S. equities indices.
At the close of U.S. trading, the Dow 30 rose 0.23%, the S&P 500 index rose 0.51%, while the NASDAQ Composite index rose 0.67%.
The CBOE Volatility Index index, which measures the outlook for market volatility, was down 0.93% at 13.86.
U.S. pharmaceutical Allergan Inc (NYSE:AGN), which makes Botox, agreed to be acquired by Ireland's Actavis Inc (NYSE:ACT) in a $66 billion deal, a move that sent healthcare stocks gaining and taking up broader stock indices up with them.
Canada's Valeant Pharmaceuticals (NYSE:VRX) had previously sought control of Allergan, and had planned to cut Allergan's research and development spending and lay off thousands of workers.
Meanwhile in Europe, improving economic sentiment boosted U.S. stocks as well as did upbeat data back home.
The ZEW Centre for Economic Research reported earlier that its German economic sentiment index rose by 15.1 points to a four-month high of 11.5 this month from October’s reading of -3.6.
Analysts had expected the index to improve by 4.5 points to 0.9 in November.
In addition, the index of euro zone economic sentiment increased to 11.0 in October from 4.1 in September, above expectations for an increase to 4.3, and the better-than-expected data gave the euro a shot in the arm.
Back in the U.S., the Commerce Department reported earlier that producer prices inched up by a seasonally adjusted 0.2%, confounding forecasts for a 0.1% decline, after falling 0.1% in September.
Year-over-year, the U.S. producer price index rose at 1.5% in October, outpacing expectations for a 1.2% increase and following a gain of 1.6% in the preceding month.
The core producer price index, which is stripped of volatile food and energy components, eased up by a seasonally adjusted 0.4% last month, beating expectations for a gain of 0.2% and following a flat reading in September.
Core producer prices rose 1.8% year-on-year in October, surpassing forecasts for 1.5% and up from 1.6% in the preceding month, and the data reflected a more robust U.S. recovery.
Leading Dow Jones Industrial Average performers included UnitedHealth Group Incorporated (NYSE:UNH), up 1.80%, Boeing Company (NYSE:BA), up 1.74%, and General Electric Company (NYSE:GE), up 1.50%.
The Dow Jones Industrial Average's worst performers included Home Depot Inc (NYSE:HD), down 2.09%, International Business Machines (NYSE:IBM), down 1.38%, and Microsoft Corporation (NASDAQ:MSFT), down 0.83%.
European indices, meanwhile, ended the day higher.
After the close of European trade, the DJ Euro Stoxx 50 rose 1.16%, France's CAC 40 rose 0.86%, while Germany's DAX rose 1.61%. Meanwhile, in the U.K. the FTSE 100 rose 0.56%.
On Wednesday, the U.S. is to release data on building permits and housing starts.
Also on Wednesday, the Federal Reserve is to publish the minutes of its October meeting.