NEW YORK - U.S. stocks were slightly higher on Tuesday after Wall Street's biggest gain of the year, boosted by Tesla shares which hit an all-time high, giving a lift to the tech-heavy Nasdaq index.
Economic reports were disappointing. U.S. homebuilder confidence suffered its largest one-month drop ever in February, and the New York Federal Reserve's gauge of manufacturing showing weaker-than-expected reading, but investors quickly shifted focus to more market-positive news in mergers and acquisitions.
"Much of the recent concern over the health of the U.S. economy has been explained at the hands of the weather," said Andrew Wilkinson, chief market analyst at Interactive Brokers LLC in Greenwich, Connecticut.
Shares of Forest Laboratories Inc rocketed nearly 30 percent after Actavis said it would acquire the specialty pharmaceuticals company in a massive cash and stock deal valued at about $25 billion.
"Just the fact that acquisitions are being made shows that prices aren't completely out of whack. That's supportive to the market and it certainly shifts investors' focus from profit taking," said Rick Meckler, president of investment firm LibertyView Capital Management in Jersey City, New Jersey.
Tesla Motors Inc shares hit an all-time high following a report Apple's mergers and acquisitions chief, Adrian Perica, met Tesla Chief Executive Elon Musk last year, sparking speculation Apple could be interested in buying the electric car maker.
Tesla shares rose 3.3 percent to $204.91 after hitting an all-time intraday high of $205.72. Apple shares were up 1.1 percent at $549.80.
Coca-Cola Co reported global sales volumes below expectations. The stock was down 3.8 percent at $37.46, weighing on the Dow.
The Dow Jones industrial average rose 1.44 points or 0.01 percent, to 16,155.83, the S&P 500 gained 3.69 points or 0.2 percent, to 1,842.32 and the Nasdaq Composite added 29.485 points or 0.69 percent, to 4,273.511.
Shares of BlackBerry Ltd jumped 5.3 percent to $9.45. Dan Loeb's Third Point LLC Hedge fund disclosed a 10-million-share stake in the Canadian telecommunication and wireless equipment company.
Swedish mobile phone game maker King, best known for the hit puzzle Candy Crush Saga, said it planned to raise up to $500 million in an initial public offering.
U.S. stocks had closed higher on Friday, with major indexes notching a second straight week of gains as investors shrugged off some weak economic data that was attributed to bad weather. U.S. markets were closed Monday for Presidents Day.