US shares close at record levels
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(Close): The Dow and S&P 500 closed at record levels helped by deal making in the healthcare business.
Actavis jumped 8.5% following its deal to buy Botox-maker Allergan.
Economic news also lifted the market. One report showed that producer price inflation remain subdued in October. Another report showed that homebuilder confidence rose in November.
The National Association of Home Builders/Wells Fargo Housing Market Index rose four points to 58, amid optimism over home sales.
The technology focused Nasdaq index rose almost 0.7% to 4,702.
"I think today it was what's happening outside the US that actually propelled the US market higher," said Brent Schutte, market strategist at BMO Global Asset Management.
Those overseas factors included a measure of investor confidence in Germany which recorded its first increase in more than a year.
The rise added to speculation that Europe's biggest economy, which has been struggling in recent months, is beginning to stabilise.
Following Japan's slide back into recession, prime minister Shinzo Abe called a snap election - two years ahead of schedule - in an attempt to win renewed support for his economic policies.
However, Japan's decision to postpone a planned rise in sales tax rise provided some reassurance to investors in an otherwise bleak week for Asian markets.
Home Depot down
Shares in Home Depot fell 2% after the US's biggest home improvement retailer sounded a note of caution over the level of future profits, due to expected costs relating to a breach of customers' data.
In September, it was revealed that hackers stole the payment-card details of millions of Home Depot customers, as well as 53 million email addresses.
The price of Brent Crude oil fell by $0.93 cents to $78.38 a barrel.