U.S. stocks higher ahead of E.U. summit; Dow Jones up 0.68%

Investing.com - U.S. stocks were higher on Monday, adding to the previous week's gains after upbeat earnings reports and as investors eyed the outcome of Wednesday's European summit on the region's sovereign debt crisis.

During early U.S. trade, the Dow Jones Industrial Average rose 0.68%, the S&P 500 index climbed 0.88%, while the Nasdaq Composite index increased 1.32%.

EU leaders moved closer to an agreement on bank recapitalization on Sunday, while Germany and France neared an agreement on expanding the firepower of the euro zone’s bailout fund.

But divisions over restructuring Greek debt remained and a final agreement was not expected until Wednesday’s meeting.

Caterpillar was one of the day's top gainers, with shares soaring 4.70% after announcing that its total quarterly revenue rose 4% to USD668 million, well above expectations, sending shares up 3.71%. The world's largest maker of construction and mining equipment also said that it is continuing to add jobs, after creating nearly 5,000 between June and September alone.

In the software sector, Apple soared 2.28%, while Oracle saw shares jump 1.09% after agreeing to buy RightNow Technologies for USD1.5 billion, thus gaining customer-service expertise in order to bolster a new Internet-based product. RightNow shares skyrocketed 19.13% after the news.

Also on the M&A front, HealthSpring saw shares shoot up 33.79% on reports that it will be acquired by health insurer Cigna for about USD3.8 billion. Shares in Cigna rose 1.14% following the report.

Elsewhere, the U.S. financial sector contributed to gains, as shares in JP Morgan surged 2.96% and Citigroup jumped 2.84%, while Bank of America and Goldman Sachs climbed 1.70% and 1.72% respectively.

On the downside, Netflix dropped 1.17% after confirming that it will launch a subscription service in Great Britain and in Ireland in early 2012. The media streaming company was due to report quarterly earnings after the close of markets.

Other stocks in focus included Texas Instruments, due to report third-quarter earnings later in the day. Investors are eager to see whether there was any improvement in demand for its chips, used in everything from cars to cellphones, ahead of the holiday shopping season.

Across the Atlantic, European stock markets were sharply higher. The EURO STOXX 50 climbed 1.26%, France’s CAC 40 jumped 1.41%, Germany's DAX rose 1.42%, while Britain's FTSE 100 posted a 1.03% increase.

During the Asian trading session, Hong Kong's Hang Seng Index rallied 3.9%, while Japan’s Nikkei 225 Index jumped 1.9%.

Also Monday, a preliminary report showed that the Chinese HSBC manufacturing activity index rose to 51.1 in October, a five-month high after contracting in the three previous months.