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New York - US stocks closed mostly higher on Tuesday as investors weighed mixed company news and an unexpected slump in home builder confidence.
The Dow Jones Industrial Average shed 23.99 points to 16 130.40.
The tech-rich Nasdaq Composite climbed 28.76 points to 4 272.78 , while the S&P 500 index, a broad measure of the markets, advanced 2.13 points to 1 840.76.
"Equity indices kicked off the abbreviated trading week on a relatively quiet note," analysts at Briefing.com said in a client note. Markets were closed on Monday for the Presidents Day holiday.
The health care sector gained support on news of a $25bn acquisition deal that has Irish generic drug maker Actavis buying US specialty pharmaceuticals firm Forest Laboratories.
Actavis will pay $89.48 per Forest share, a premium of about 25% over Forest's closing share price on Friday. US-traded Actavis shares surged 5.0% to $201.47 and Forest Labs soared 27.5% to $91.04.
On the blue-chip Dow, Merck rose 0.5% and UnitedHealth Group gained 0.4%.
Coca-Cola was the Dow's biggest laggard, losing 3.8% after fourth-quarter revenue missed Wall Street expectations.
Shares of home builders came under pressure after the National Association of Home Builders said its sentiment index tumbled to 46 in February from 56 in January.
NAHB said unusually severe weather conditions in much of the country was largely to blame for the slump in confidence.
Beazer Homes USA dived 2.3%, Lennar shed 0.8% and Toll Brothers lost 0.6%.
Struggling Canadian smartphone maker BlackBerry rose 0.9% after activist investor Daniel Loeb's hedge fund Third Point disclosed on Friday it had bought a 1.93% stake.
IPhone maker Apple rose 0.4% helped by press reports that it is in talks to buy electric automaker Tesla Motors. Tesla advanced 2.8%.
News that the developer of the popular Candy Crush game, King Digital Entertainment, is seeking a listing on the New York Stock Exchange rippled through tech stocks.
Candy Crush is available on Facebook ( +0.3%) and on mobile platforms run by Apple, Google (+0.7%) and Amazon (-1.0%).
Zynga, which developed Facebook games such as FarmVille and Mafia Wars, jumped 5.8%.
Bond prices rose. The yield on the 10-year US Treasury dropped to 2.68% from 2.75% on Friday, while the 30-year fell to 3.67% from 3.70%. Bond prices and yields move inversely.
