Stocks tied to commodities and global growth lifted the most.
Blue-chip stocks on Wall Street rose to their highest since February 1 as takeover activity and trade developments boosted confidence.
Stocks tied to commodities and global growth lifted the most, with the energy, materials and industrials sectors rising.
In a high-profile deal. PepsiCo will pay $US3.2 billion for Sodastream International, the Israeli company that leads the home carbonation market around the world.
PepsiCo’s departing chief executive, Indra Nooyi, has built a years-long relationship with SodaStream and had previously approached it at least once in the past eight years, sources say.
SodaStream has courted controversy in recent years because its former location – in the West Bank town of Ma’aleh Adumim – made it a target for anti-Israeli campaigns.
In 2014, SodaStream moved its operations to Tel Aviv and its manufacturing operations to southern Israel.
Pepsi shares fell 0.2%, while SodaStream added 9.4%.
Meanwhile, Tyson Foods is offering $US2.2b for Keystone Foods, a supplier of chicken nuggets to McDonald’s and other companies. Tyson shares rose 1.3%.
The Dow Jones Industrial Average climbed 89.27 points, or 0.35%, to 25,758.59. The S&P 500 added 0.2% to 2857.06 and the tech-heavy Nasdaq Composite gained 0.1% to 7821.01.
Analysts say global issues such as the US-China trade war and emerging markets disarray haven’t seriously affected US business strength.
“The signal that we can take away from that is that sentiment has not been hit sufficiently by the trade uncertainty that it puts business decisions in question,” JP Morgan Asset Management global market strategist Gabriela Santos says.
The trade war has hurt stocks around the world and other risk assets such as commodities.
Turkey credit downgraded
Turkey remains a serious concern, with its currency falling another 1.3% against the US dollar.
S&P Global Ratings and Moody’s Investors Service have downgraded Turkey one notch further below investment grade, citing recent extreme economic and financial volatility.
The US rebuffed an offer by Turkey to release a Christian preacher, who is being held hostage, in return for a relief for a large Turkish bank facing billions of dollars in US fines.
“When it comes to Turkey specifically, I wouldn’t say it's out of the woods just yet,” Union Bancaire Privée portfolio manager Mohammed Kazmi says.
Turkey’s central bank needs to raise interest rates significantly to restore investor confidence but this is unlikely while Islamic leader Recep Tayyip Erdogan remains in control.
Combining Turkey’s situation with a recent strengthening of the dollar, “it brings the focus back on short-term external debt levels within emerging markets, especially as it looks as if the Fed will continue hiking [rates],” Mr Kazmi says.
The WSJ Dollar Index, which tracks the dollar against a basket of 16 other currencies, edged down 0.1%.
The yield on the benchmark 10-year US Treasury note declined to 2.823% from 2.873% on Friday.
US oil prices continued to fall, extending a seven-week slide as investors remained concerned about global demand despite hopes the US and China will resolve their trade differences.
US crude for September delivery was 0.1% lower at $US65.13 a barrel. Brent crude, the global benchmark, rose 0.3% to $US72.07 a barrel.
Gains in commodity-linked firms pushed the Stoxx Europe 600 up 0.6% after the index posted its biggest weekly decline since June.
France’s CAC 40 rose 0.65%, Germany’s DAX was up 1.0% and the UK’s FTSE 100 climbed 0.4%.
Stocks in Asia were mostly higher. Hong Kong’s Hang Seng added 1.4%, while the Shanghai Composite Index rose 1.1% after five sessions of declines.
