The market got a lift after American International Group Inc. agreed to sell its Asian life insurance business to Britain's Prudential PLC for $35.5 billion. It's the biggest deal yet made by the troubled insurer since it received multiple bailout packages from the government during the credit crisis.
AIG, based in New York, had been planning to sell the division, known as AIA Group, as part of its plan to streamline operations and repay the government. As of Dec.
31, AIG's outstanding assistance from the government totaled $129.3 billion.
AIG reported disappointing fourth-quarter results Friday, which tempered gains in the market.
Overseas markets rose on hope that European nations will announce a bailout deal to help Greece with its mounting debt problems. Stocks around the world have been hurt in recent months because of concerns debt problems in Greece would spread to other countries and upend any possibility of a global recovery.
European Union and Greek officials are meeting and a deal could be hammered out soon that would involve state-owned banks in Europe buying Greek government bonds. Greece must roll much of its debt in the coming months.
In midmorning trading, the Dow Jones industrial average rose 53.59, or 0.5 percent, to 10,378.85. The Standard & Poor's 500 index rose 7.40, or 0.7 percent, at 1,111.89, while the Nasdaq composite index is up 21.30, or 1 percent, at 2,259.56.
Bond prices were mixed. The yield on the benchmark 10-year Treasury note, which moves opposite its price, was unchanged at 3.62 percent compared with late Friday.
The dollar rose against other major currencies, while gold fell.
In other economic news, growth in manufacturing continued last month but at a slower pace. The Institute for Supply Management said its manufacturing index fell to 56.5 in February from 58.4 in January. The level is below the 58 economists predicted. But the report also found that manufacturing employment is improving. The ISM releases its services industries index on Wednesday.