Signs of more corporate dealmaking sent U.S. stocks higher on Tuesday, allowing investors to take their mind off Greece's debt troubles.
Investors were also looking ahead to Wednesday's economic and interest rate policy update from the Federal Reserve. They'll be looking for hints as to when the central bank will begin raising its key interest rate.
The Dow Jones industrial average rose 113.31 points, or 0.6 percent, to 17,904.48. The Standard & Poor's 500 index rose 11.86 points, or 0.6 percent, to 2,096.29. The Nasdaq composite rose 25.58 points, or 0.5 percent, to 5,055.55.
All 10 sectors in the S&P 500 index moved higher, with consumer staples leading the gains. The sector rose 1.1 percent, but remains down 1.4 percent this year.
Health care supplier Perrigo gained $7.95, or 4.3 percent, to $191.25 as traders anticipated an acquisition. Mylan, a maker of generic drugs, has said it wants to buy the company, but is being targeted itself by Teva Pharmaceuticals.
On Tuesday, Abbott Laboratories, Mylan's biggest shareholder, said that it backed Mylan's plan to remain a stand-alone company. Teva has made a $40 billion bid for Mylan, but wants that company to drop its pursuit of Perrigo.
Coty surged 19.3 percent on news reports that the cosmetics and fragrance company has won an auction to buy several Procter & Gamble businesses. Coty gained $5.03 to $31.08.
News that U.S. homebuilders broke ground on fewer homes last month sent shares lower. Meritage Homes fell the most, losing 59 cents, or 1.3 percent, to $43.58.