Wall Street rose Tuesday on merger and acquisition news.

The Commerce Department reported that new orders for manufactured goods from U.S. factories dropped by 0.5 percent in May. The drop came after factory orders gained 2.6 percent in April and 4.1 percent in March.

Meanwhile, pending home sales showed existing-home sales in the United States may ease but should stay fairly close to present levels in the months ahead, the National Association of Realtors (NAR) said Tuesday.

The NAR's pending home sales index, based on contracts signed, stood at 97.7 in May, its lowest point since September 2001, down 3.5 percent from the previous month. The decline followed a 3.2 percent drop in April and a 4.5 percent dip in March.

The markets were boosted by takeover news as Kraft Foods Inc. said it offered 7.2 billion dollars to buy the biscuit division of French food company Danone.

The Dow Jones industrial average rose 41.87, or 0.31 percent, to 13,577.30. The Standard & Poor's 500 index gained 5.44, or 0.36percent, to 1,524.87, and the Nasdaq composite index lifted 12.65,or 0.48 percent, to 2,644.95.