Stocks on Wall Street rebounded to recover all of last Friday’s 100-drop on the blue chip index, pushing the market to a 15-month high.
Healthcare shares reacted positively to indications new legislation may fail after an upset Republican win in the Massachussetts senatorial by-election to choose a successor to the late Edward Kennedy.
Drug companies Merck jumped 3% and Pfizer 2.3%, pushing the Dow Jones Industrial Average up 115.78 points, or 1.1%, to close at 10,725.43, its fourth gain in five sessions.
Kraft Foods led the measure's decliners, off 2.6% after it clinched a $US19.7 billion deal to acquire Cadbury. Financial components Bank of America and JP Morgan Chase also fell close to 1% each, after Citigroup posted a fourth-quarter loss.
However, Citigroup, which is not a Dow component, climbed 0.9% as investors were relieved to see improvement in the bank's losses from consumer loans in the US, Asia, and Latin America.
The S&P 500-share index climbed 1.3% to close at 1150.23, with its healthcare sector in the lead. Only energy was in the red as oil futures slumped.
The technology-heavy Nasdaq Composite soared 1.4% to 2320.40.
European shares rose, helped by deal-inspired gains for Cadbury and by advances for pharmaceuticals and telecommunications firms.
Cadbury shares rose 3.6% to 837p to match Kraft’s higher bid that ends a four-month takeover tussle.
Drugmakers, including Sanofi-Aventis, up 1.8%, and telecoms including France Telecom, up 1.1%, were in the lead as investors bought shares in companies that aren't particularly tied to economic growth.
The pan-European Dow Jones Stoxx 600 index gained 0.8% to 260.27.
The UK FTSE 100 index closed up 0.3% to 5,513.14, the German DAX index advanced 1% to 5,976.48 and the French CAC-40 index climbed 0.8% to 4,009.67.
Commodities: Oil down, gold up
Crude oil futures continued to slide due to concerns over the strength of economic recovery and continued milder temperatures.
Light, sweet crude for February delivery recently traded 90USc, or 1.2%, lower at $US77.10 a barrel in New York. Prices had dipped to an intraday low of $US76.76 a barrel, the lowest level since December 24.
Brent crude on the ICE futures exchange traded $US1.43, or 1.9%, lower at $US75.67 a barrel.
Gold futures rose as investors spurned riskier assets amid concerns over Greece's sovereign debt and the German economic recovery.
February gold is up $US3.40 at $US1,133.90 an ounce in New York.
Currencies: Dollar up, euro down
The US dollar benefited from euro-zone woes as worse-than-expected German economic data and continued concern over sovereign-credit issues in Greece sank the common currency to near its lowest levels of 2010.
The greenback also firmed against the Canadian dollar after the Canadian central bank left key interest rates unchanged and gave no clues as to when rates would increase.
Meanwhile, a further tightening of Chinese monetary policy led some investors to worry whether a brake on Chinese economic growth would reverberate to other economies crawling out of recessions.
In recent trading, the euro was at $US1.4269 from $US1.4380 late on Monday. The dollar was at ¥91.10, up from ¥90.77, while the euro was at ¥129.99 from ¥130.53.
The UK pound was at $US1.6368 from $US1.6336.
Wed, 20 Jan 2010