The S&P and the Nasdaq hit fresh records on Monday as investors bet U.S. lawmakers would strike a deal to end a federal government shutdown and as a flurry of deals buoyed sentiment.
U.S. senators were scheduled to vote midday on a funding bill, following failed attempts over the weekend to arrive at a consensus.
"What you`re seeing is the belief that they will ultimately, whether it`s today or in the next few days, come to some kind of a bipartisan agreement on the budget, and the market is reflecting its confidence," said Ryan Larson, head of U.S. equity trading at RBC Global Asset Management in Chicago.
At 11:03 a.m. ET (1603 GMT), the S&P 500 was up 7.34 points, or 0.26 percent, at 2,817.64 and the Nasdaq Composite was up 35.90 points, or 0.49 percent, at 7,372.28.
The Dow Jones Industrial Average was down 12.79 points, or 0.05 percent, at 26,058.93.
Weighing on the Dow were the industrial stocks, led a 1.3 percent drop in General Electric following a downgrade and price target cut by BofA-Merrill Lynch. The stock fell below $16 for the first time since 2011, extending a losing streak from last week.
Defense stocks such as Boeing, Northrop Grumman and L3 Technologies dropped between 0.6 percent and 1.1 percent, sending the Dow Jones U.S. Defense sector index down 0.7 percent.
Boosting the Nasdaq was a clutch of biotech deals, with the biotech index up about 2.3 percent.
Shares in U.S. hemophilia specialist Bioverativ soared 63 percent after French healthcare group Sanofi agreed to buy the company for $11.6 billion.
Juno Therapeutics rose about 27 percent after Celgene agreed to buy the biotech for about $9 billion in cash.
Insurer AIG said it would buy reinsurer Validus Holdings for $5.56 billion. Validus surged 45 percent.
Nine of the 11 major S&P sectors were higher, led by a 1.1 percent gain in the energy index and 0.9 percent rise in utilities index.
Halliburton Co rose 4.2 percent after posting a much bigger-than-expected quarterly profit in the fourth quarter, benefiting from a shale-driven surge in U.S. oil production.
Shares of Netflix Inc, a major contributor to the recent stock rally, were up about nearly 3 percent ahead of its quarterly results after market closes.
Advancing issues outnumbered decliners on the NYSE by 1,498 to 1,258. On the Nasdaq, 1,401 issues fell and 1,380 advanced.
(This article has not been edited by Zeebiz editorial team and is auto-generated from an agency feed.)