REFILE-US STOCKS-Wall St gains as M&A offsets China’s rate hike

(Refiles to insert inadvertently dropped word ‘percent’ in
paragraph 11)

* Texas Instruments offers to buy National Semiconductor

* China hikes interest rates but impact may be muted

* Nasdaq OMX rebalances Nasdaq 100, Microsoft rallies

* Dow up 0.2 pct, S&P up 0.3 pct, Nasdaq up 0.5 pct

* For up-to-the-minute market news see [STXNEWS/US]
(Updates to midday, changes byline)

By Ryan Vlastelica

NEW YORK, April 5 (Reuters) – U.S. stocks advanced on
Tuesday as a large acquisition helped lift positive sentiment
and offset another rate hike in China.

Texas Instruments (TXN.N: Quote, Profile, Research) late Monday offered to buy
National Semiconductor (NSM.N: Quote, Profile, Research) in a deal worth $6.5 billion, a
premium of 78 percent. National Semi shares jumped 71.4
percent to $24.11. Texas Instruments added 1.9 percent to
$34.74. For details, see [ID:nLDE7340KR]

The deal is the latest in a string of multibillion-dollar
deals that have helped pushed stocks higher in recent weeks.
The Dow closed at a new 2011 high on Monday, its highest level
since June 2008, though volume was the lowest of the year.

“These kinds of deals show that even with the rate hike
and the ISM number, prices are still extremely attractive,”
said Tim Courtney, chief investment officer at Burns Advisory
Group in Oklahoma City. “That’s why the market is holding
steady despite some bad news.”

China’s central bank increased interest rates on Tuesday
for the fourth time since October, raising suspicions that
data next week may show inflation rose more than expected in
March.

In the latest snapshot of the U.S. economy, the Institute
for Supply Management showed the vast U.S. services sector
grew more slowly in March than it did in February. The pace of
March growth was slower than what economists had expected.
[ID:nL3E7F51LX] and [ID:nN04250301

The Dow Jones industrial average (.DJI: Quote, Profile, Research) was up 25.96
points, or 0.21 percent, at 12,425.99. The Standard & Poor’s
500 Index (.SPX: Quote, Profile, Research) was up 4.24 points, or 0.32 percent, at
1,337.11. The Nasdaq Composite Index (.IXIC: Quote, Profile, Research) was up 13.84
points, or 0.50 percent, at 2,803.01.

Earlier, the Dow touched a fresh intraday high at
12,430.76.

The S&P 500 rose above 1,333, a closely watched level that
is double the low it reached in the financial crisis. It
hasn’t ended above that level since mid-February, and the
recent light volume has prompted questions over how much
enthusiasm there is to continue the rally.

Apple Inc (AAPL.O: Quote, Profile, Research) slid 0.4 percent to $339.90, off its
session low after the stock had its weighting cut in a
rebalancing of shares in the Nasdaq 100 (.NDX: Quote, Profile, Research). The
rebalancing, which takes effect May 2, forced some to sell the
iPhone maker’s stock.

Some companies had their weightings increased, including
Microsoft Corp (MSFT.O: Quote, Profile, Research) and Cisco Systems Inc (CSCO.O: Quote, Profile, Research).
Microsoft’s stock gained 1.7 percent to $25.99 and topped the
Nasdaq’s most-active list. Cisco’s shares rose 1.1 percent to
$17.25. [ID:nN05109783]

Investors will scour the minutes from the latest meeting
of the Fed’s policy-setting committee, expected at 2 p.m.
(1800 GMT). Fed Chairman Ben Bernanke said a recent rise in
U.S. inflation was driven primarily by global commodity prices
and was unlikely to persist.

KB Home (KBH.N: Quote, Profile, Research) shares dropped 2.7 percent to $11.87 after
it reported a first-quarter loss that widened from the
previous year, hurt by a fall in net orders. [ID:nL3E7F520B]
(Reporting by Ryan Vlastelica; Editing by Jan Paschal)

REFILE-US STOCKS-Wall St gains as M&A offsets China’s rate hike