Wall Street Rises On Lower Rate Hike Odds, Merger Activity

Wall Street was higher on Tuesday morning as lower chances of an interest rate hike and a host of multi-billion dollar takeover deals boosted investor sentiment.

Top Federal Reserve officials, encouraged by a string of strong economic data, had hinted that a rate hike could come as early as this month. However, Friday's disappointing employment numbers dampened those expectations.

Traders now see a 21 per cent chance of a rate hike this month, down from 24 per cent, following the jobs data. The odds edged down to 50.6 per cent from 53.6 per cent for December, according to CME Group's FedWatch tool.

The dollar index fell 0.2 per cent on Tuesday.

"The markets probably got what they most wanted," said Andre Bakhos, managing director at Janlyn Capital.

"The jobs number wasn't strong enough to strike fear of a rate hike this month, nor weak enough to cast doubts on the economy."

The Dow Jones industrial average was up 46.06 points, or 0.25 per cent, at 18,538.02. The S&P 500 was up 2.45 points, or 0.11 per cent, at 2,182.43. The Nasdaq Composite was up 11.65 points, or 0.22 per cent, at 5,261.55.

Six of the 10 major S&P 500 indices were higher, led by a 0.77 per cent rise in energy.

Spectra Energy jumped 11.7 per cent, giving the energy index its biggest boost, after Enbridge agreed to buy the company for $28 billion.

Financials fell 0.2 per cent and were the biggest drag on the benchmark index.

Shares of molecular diagnostics company Cepheid soared 52.4 per cent after the company agreed to be bought by Danaher for $4 billion, including debt. Danaher's shares were marginally lower.

Navistar jumped 31.2 per cent after Volkswagen agreed to supply engines to US truck maker in exchange for a 16.6 per cent stake.

Monsanto edged up 0.61 per cent after German chemical maker Bayer sweetened its bid to buy the world's largest seed company.

Advancing issues outnumbered decliners on the NYSE by 1,618 to 1,048. On the Nasdaq, 1,377 issues rose and 1,009 fell.

The S&P 500 index showed 23 new 52-week highs and no new lows, while the Nasdaq recorded 95 new highs and six new lows.