US STOCKS-Wall St rises; energy leads despite oil weakness
* Energy names rally despite continued drop in oil prices
* Otsuka to buy Avanir; Cypress Semi to buy Spansion
* Biogen rallies on favorable Alzheimer's drug data
* Indexes up: Dow 0.4 pct, S&P 0.5 pct, Nasdaq 0.4 pct (Updates to mid-morning trading)
By Ryan Vlastelica
NEW YORK, Dec 2 (Reuters) - U.S. stocks rose on Tuesday as a pair of big M&A deals boosted market optimism and helped the market rebound from the broad decline in the previous session, which was the S&P 500's weakest day in a month.
The day's gains were broad, with nine of the 10 primary S&P 500 sectors higher. The only group to fall was telecom , off 0.6 percent. The sector is considered defensive.
Energy shares were the strong sector on the day despite continued weakness in the price of crude oil. While oil fell 1 percent to $68.35 per barrel - extending a decline that has taken the commodity down more than 30 percent from a recent peak - the S&P energy sector reversed earlier losses and rose 1.8 percent.
"Valuations have gotten pummeled under the weight of declining crude prices, and it looks like investors are starting to nibble at the space," said Mark Luschini, chief investment strategist at Janney Montgomery Scott in Philadelphia. "The group looks extremely oversold, and dividends remain pretty strong." Continuación...