(By Balachander) U.S. stocks closed sharply higher amid hopes that Greece will remain in the euro zone and China might announce additional stimulus measures to support growth.
S&P 500 Index added 1.11 percent to finish at 1,332.42. The Dow Jones Industrial Average gained 1.01 percent to end at 12,580.69. The Nasdaq Composite Index rose 1.18 percent to close at 2,870.99.
On the US economic front, the S&P/Case-Shiller home price index, which tracks monthly values of residential real estates in 20 metropolitan regions, inched 0.1 percent higher in March, coming in shy of economists' expectations for a gain of 0.2 percent. Meanwhile, the Conference Board reported that consumer confidence index unexpectedly dropped to a fourth-month low to 64.9 in May from a downwardly revised 68.7 in April.
There has been speculation that China may soon launch a stimulus program to boost growth in the world's second largest economy.
On the European news front, weekend polls showed Greece's pro-bailout parties gaining ground ahead of next month's elections. Meanwhile, Egan-Jones ratings Co. downgraded Spain's sovereign credit rating for the third time in a month on the country's deteriorating economic outlook.
Hot Stocks Of The Day: FB, CHK, IBI, VRTX, LCRY
In corporate news, Facebook Inc. (NASDAQ:FB) shares hit a new low, retreating 22.5 percent from its IPO price of $38 as options trading began. The social networking giant is rumored to be considering acquisitions of Norwegian browser maker Opera Software and facial recognition software developer Face.com, weeks after raising $16 billion from its initial public offering. The stock closed 9.6 percent lower.
Vertex Pharmaceuticals Inc. (NASDAQ:VRTX) plunged 10.87 percent after the drug maker revised data involving cystic-fibrosis treatments.
LeCROY Corp. (NASDAQ:LCRY) jumped 55.36 percent after Teledyne Technologies Inc. (NYSE:TDY) agreed to buy the oscilloscopes maker for around $291 million, or $14.30 per share, in cash. The deal represents a premium of 56.5 percent to LCRY's previous closing price. TDY shares added 1.37 percent.
Interline Brands Inc. (NYSE:IBI) shot up 39.80 percent after the distributor of industrial products agreed to be taken private in a deal valued at $25.50 per share in cash. The deal represents a premium of about 42 percent to IBI's previous closing price of $17.94. IBI will be acquired by affiliates of GS Capital Partners LP, direct private investment unit of Goldman Sachs (GS), and New York-based investment firm P2 Capital Partners LLC.
Chesapeake Energy Corp. (NYSE:CHK) added 3.42 percent after Carl Icahn reported a 7.6 percent stake in the troubled oil and gas company. The activist investor called for the replacement of at least four of the company's current board members.
The European markets ended higher amid Greece optimism, with Germany's DAX advancing 1.16 percent to finish at 6,396.84. France's CAC40 added 1.37 percent to close at 3,084.70. U.K.'s FTSE 100 rose 0.65 percent to end at 5,391.14.
Asian markets too closed higher tracking global cues. The Shanghai Composite Index rallied 1.18 percent to end at 2,389.25. Hong Kong's Hang Seng jumped 1.35 percent to close at 19,055.46. Japan's Nikkei 225 gained 0.74 percent to close at 8,657.08. India's BSE Sensex finished at 16,438.58, up 0.13 percent.
Commodity & Currency Scan:
Crude oil futures shed 0.11 percent to $90.76 per barrel, and natural gas futures fell 5.41 percent to $2.429 per million metric British thermal units. Gold futures lost 0.97 percent to $1,556.0 per ounce, and silver futures retreated 2.13 percent to $27.78 per ounce.
In the currency market, the euro fell 0.37 percent against the U.S. dollar to $1.2495. The British pound dropped 0.32 percent against the greenback to 1.5633, while the dollar added 0.06 percent against the Japanese yen to 79.5200.