While you were sleeping: UPDATED US stocks rise as pharma giants end deal

Shares of Pfizer and Allergan led gains in healthcare stocks on both sides of the Atlantic as their abandoned merger plans, following new US tax rules, spurred fresh bets on new merger and acquisition activity in the sector.

Wall Street gave up some of its earlier gains after minutes of the March Federal Reserve meeting showed US policymakers discussed an interest rate increase for their April meeting.

Chairwoman Janet Yellen last week said the Fed would proceed cautiously when it came to rate hikes.

Federal Open Market Committee members "expressed a range of views about the likelihood that incoming information would make an adjustment appropriate at the time of their next meeting," the minutes showed.

"Several expressed the view that a cautious approach to raising rates would be prudent or noted their concern that raising the target range as soon as April would signal a sense of urgency they did not think appropriate.

"In contrast, some other participants indicated that an increase in the target range at the committee's next meeting might well be warranted if the incoming economic data remained consistent with their expectations for moderate growth in output, further strengthening of the labour market, and inflation rising to 2% over the medium term."

Dow gains 113 points
Wall Street rose, recovering after it pared back some of its earlier gains both in morning and late afternoon trading.

The Dow Jones Industrial Average finished 112.73 points, or 0.6%, up at 17,716.05 while the Nasdaq Composite Index climbed 1.6% to 4920.72. The Standard & Poor's 500 Index gained 1.05% to 2066.66.

"Clearly there's some disagreement within the Fed but that being said, Janet Yellen couldn't have been more clear with her comments last week with her reticence and dovishness," New York-based Federated Investors portfolio manager Steve Chiavarone told Bloomberg.

Gains in shares of Pfizer and those of Merck, up 4.9% and 2.5% respectively, led the advance in the Dow.

Shares of New York-based Pfizer rallied after it and Dublin-based Allergan said they agreed to terminate their plans for a $US160 billion merger because of new US tax rules aimed at curbing international corporate deals to take advantage of lower overseas tax rates.

"We plan to make a decision about whether to pursue a potential separation of our innovative and established businesses by no later than the end of 2016," Pfizer's chief executive Ian Read says. "As always, we remain committed to enhancing shareholder value."

Shares of Allergan traded 3.2% higher.

Monsanto rethinks strategy
Shares of Monsanto fell 0.3% in afternoon trading. The world's largest seed company, thwarted in its repeated attempts to buy Switzerland's Syngenta, says it s rethinking its growth strategy. St Louis-based Monsanto also posted disappointing quarterly results.

"We no longer see large-scale M&A as a likely opportunity," chief executive Hugh Grant told investors.

US crude oil gained 5.2% to $US37.75 a barrel, extending gains after data showed supplies dropped last week.

In Europe, the Stoxx 600 Index finished the session with a 0.8% gain from the previous close.

Germany's DAX Index rose 0.6%, France's CAC 40 Index increased 0.8%, while the UK's FTSE 100 Index rallied 1.2%.

Shares of Glencore closed 1.2% lower in London after the miner and commodities trader said it has agreed to sell a 40% stake in its agricultural business to Canada Pension Plan Investment board, the country's largest pension fund, for $US2.5 billion in cash.

The deal, which is part of Glencore's efforts to reduce its debt, is expected to close in the second half of this year, subject to regulatory approval and values the equity of Glencore's agricultural business at $US6.25 billion.

(BusinessDesk)