By Herbert Lash
NEW YORK (Reuters) - Stocks on Wall Street surged to an all-time high on Monday on optimism over merger activity that also lifted global equities markets, while crude oil prices rose, helped by expectations of revived growth in the demand for oil.
U.S. stocks advanced in a broad rally, pushing the benchmark S&P 500 to a record as the Nasdaq punched to a new high for 2014 and levels last seen almost 14 years ago, when the technology bubble was imploding.
A surprise improvement in German business morale added to optimism over the euro zone's recovery, helping to boost European shares. The lifting of Spain's sovereign debt rating one notch by Moody's Investors Service Inc. also helped boost European shares.
Recent U.S. data that came in below expectations had fueled concern that equity markets were over-valued. But that view was offset by a string of merger and acquisition activity.
Radio frequency chipmaker RF Micro Devices Inc agreed to buy peer TriQuint Semiconductor Inc for about $1.6 billion, and Men's Wearhouse Inc raised its offer for Jos. A. Bank Clothiers Inc by more than 10 percent.
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Billionaire investor Carl Icahn's renewed call for the spinoff of eBay Inc's fast-growing PayPal division added to the merger frenzy.
"The M&A news still seems to be moving forward between the RF Micro deal, the Jos. A Bank deal and Carl Icahn's pushing on eBay," said Rick Meckler, president of hedge fund LibertyView Capital Management LLC in Jersey City, New Jersey.
"For some investors that suggests the markets may not be over-valued if it allows for this kind of activity," he said.
Shares of RF climbed 15.7 percent to $6.725, while TriQuint gained 21.2 percent to $11.19. Men's Wearhouse rose 9.1 percent to $49.23, while Jos. A. Bank was up 8.2 percent at $59.58.
Shares of eBay rose 3.3 percent to $56.38.
Reduced tensions in Ukraine, where new authorities issued an arrest warrant for mass murder against ousted President Viktor Yanukovich, also boosted sentiment, Meckler said.
MSCI's all-country equity index rose 0.77 percent, while the FTSEurofirst 300 index of top European shares closed up 0.64 percent at a preliminary 1,351.65.
German business morale rose in February to its highest since July 2011, Munich-based Ifo think tank's business climate index showed, suggesting Europe's largest economy will grow at a faster pace in the first quarter after expanding only modestly last year. European stocks have risen sharply over the past 2 1/2 weeks, boosted by hopes the region's economic growth and corporate profits will recover this year.
On Wall Street, the Dow Jones industrial average rose 184.39 points, or 1.15 percent, to 16,287.69. The Standard & Poor's 500 Index was up 20.65 points, or 1.12 percent, at 1,856.90. The Nasdaq Composite Index was up 43.37 points, or 1.02 percent, at 4,306.78.
U.S. Treasury prices fell. The 10-year note fell 7/32 in price to yield 2.7572 percent.
German Bund futures fell to the day's low on the German sentiment indicator. The Bund traded down 19 ticks to settle at 143.68.
Brent crude oil rose above $110 a barrel, resisting sharp declines in some other risk assets on news of further supply losses in Africa and expectations of revived oil demand growth.
Oil markets found support from a fairly upbeat meeting of officials from the world's top economies in Sydney, who announced a target of generating more than $2 trillion in additional output over five years while creating millions of new jobs.
Brent crude was up 70 cents at $110.55 a barrel, after settling higher for a second straight week. U.S. oil was up 95 cents to $103.15 a barrel.
Gold rose to a near four-month high, adding to last week's gains as investors grew more anxious about the pace of the U.S. economic recovery and China's growth.
Gold futures for April delivery rose more than 1 percent to $1,337.00 an ounce.
The euro traded near break-even against the dollar, down 0.02 percent at 1.3734.
The dollar index fell 0.05 percent to 80.202, while against the yen, the dollar was 0.01 percent lower at 102.51.
(Reporting by Herbert Lash; Additional reporting by Nigel Stephenson in London; Editing by Dan Grebler)