US STOCKS-Investors buy stocks dip after Dell, deal news

                                

                                
 * S&P 500 now double the level it was two years ago
                                
 * Sanofi-Aventis clinches deal for Genzyme at $20.1 bln
                                
 * Discount retailers up as Peltz bids for Family Dollar
                                
 * Indexes up: Dow 0.52 pct, S&P 0.6 pct, Nasdaq 0.79 pct
                                
 * For up-to-the-minute market news see [STXNEWS/US]
 (Updates to late afternoon, changes byline)
                                
 By Rodrigo Campos
                                
 NEW YORK, Feb 16 (Reuters) - U.S. stocks rose to fresh
32-month highs on Wednesday, with the S&P 500 double the level
it was two years ago as Dell earnings and deal announcements
appealed to investors.
                                
 Concern about tensions between Israel and Iran weighed on
the market in late morning trading, but indexes slowly climbed
back near the session's highs.
                                
 Still, volume was only slightly better than earlier in the
week and could struggle to match the year's average of near 8
billion shares traded per day on the New York Stock Exchange,
NYSE Amex and Nasdaq.
                                
 Dell Inc <DELL.O>, the world's No. 2 personal computer
maker after Hewlett-Packard, flew past Wall Street's profit and
margins estimates late on Tuesday, and its shares jumped 13.4
percent to $15.78. For details, see [ID:nL3E7DG1XK]
                                
 "It seems that there's just a lot of pent-up demand, and
the market is very quick to shrug off news that could appear
negative," said Angel Mata, managing director of listed equity
trading at Stifel Nicolaus in Baltimore.
                                
 Two Iranian warships planned to sail through the Suez canal
en route to Syria on Wednesday, an Israeli official said,
calling it a "provocation" by the Islamic Republic. For
details, see [ID:nLDE71F2AV].
                                
 The pullback following the comments was another opportunity
for money on the sidelines to get back into stocks, Mata said.
                                
 The Dow Jones industrial average <.DJI> added 63.95 points,
or 0.52 percent, to 12,290.59. The Standard & Poor's 500 Index
<.SPX> gained 7.97 points, or 0.60 percent, to 1,335.98. The
Nasdaq Composite Index <.IXIC> rose 22.10 points, or 0.79
percent, to 2,826.45.
                                
 The benchmark S&P 500 earlier broke above 1,333.58, double
the intraday low hit in early March 2009, and was trading just
below that level after midday.
                                
 French drugmaker Sanofi-Aventis SA <SASY.PA> agreed to buy
Genzyme Corp <GENZ.O> for $20.1 billion in cash. Genzyme shares
rose 1.4 percent to $75.32. [ID:nLDE71F046]
                                
 In another proposed deal, activist investor Nelson Peltz's
Trian Group offered to acquire Family Dollar Stores Inc <FDO.N>
for $55 to $60 per share in cash, giving the company an implied
value of $7.6 billion. Family Dollar soared 21.7 percent to
$53.50. [ID:nN15231945]
                                
 Trian's bid for Family Dollar helped shares of other
discount retailers. Dollar Tree Inc <DLTR.O> was up 2.9 percent
to $52.42 while Dollar General Corp <DG.N> rose 12.1 percent to
$30.20.
 (Editing by Padraic Cassidy)