Stocks rebound on deals and data

Encouraging U.S. economic data and a batch of corporate deals put investors in a buying mood Monday, sending stocks sharply higher.

The broad rally nudged the Dow Jones industrial average back into positive territory for the year after a rough stretch for the market most of last week.

Traders welcomed a government report showing that consumer spending and incomes rose in February.

Another report hinted at strong start to the spring home-buying season.

Energy stocks were among the biggest gainers, bucking a slide in the price of crude oil. Several drug makers soared on merger news.

“You had all the elements today for a positive market,” said Quincy Krosby, market strategist for Prudential Financial.

The Dow climbed 263.65 points, or 1.5%, to 17,976.31. The 30-company index was up as much as 295 points. It’s now up 0.9% for the year.

The Standard & Poor’s 500 index rose 25.22 points, or 1.2%, to 2,086.24, and the Nasdaq composite gained 56.22 points, or 1.2%, to 4,947.44. Both indexes are also up for the year.

All 10 sectors in the S&P 500 rose, with energy stocks notching the biggest gain. The sector increased 2.1%. It’s still down 2.7% for the year. Analog Devices led all stocks in the S&P 500, climbing $5.97, or 10.2%, to $64.81.

Investors bid up several healthcare companies and drug makers involved in deals.

UnitedHealth Group jumped 2.5% after the insurer agreed to buy pharmacy benefits manager Catamaran. Shares in UnitedHealth Group added $2.99 to $121. Catamaran vaulted 23.8%, adding $11.51 to $59.83.

Auspex Pharmaceuticals soared 41.5% after it agreed to be acquired by Teva Pharmaceuticals Industries for about $3.2 billion in cash. Auspex rose $29.45 to $100.36.

Horizon Pharma climbed 18.2% on news that it is buying Hyperion Therapeutics for $1.1 billion. Horizon rose $3.97 to $25.78. Hyperion added $3.24, or 7.6%, to $45.98.