By MATT JARZEMSKY

Fresh corporate deal news and an upbeat reading on German investor confidence emboldened U.S. stock investors, helping send major benchmarks to five-year highs.

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Google shares, up more than 14% this year, topped $800 for the first time.

The Dow Jones Industrial Average added 53.91 points, or 0.4%, to 14035.67, its highest close since October 2007. The S&P 500 advanced 11.15 points, or 0.7%, to 1530.94, after capping its seventh consecutive weekly gain, the longest such stretch since January 2011. The Nasdaq Composite Index gained 21.56 points, or 0.7%, to 3213.59.

OfficeMax (OMX) surged $2.25, or 21%, to $13.00 and Office Depot (ODP) jumped 43 cents, or 9.4%, to 5.02 after The Wall Street Journal reported the companies are in advanced talks to merge in a stock-for-stock deal. Rival Staples (SPLS) climbed 1.70, or 13%, to 14.65, leading gains among S&P 500 components.

MarketWatch's Laura Mandaro discusses three stocks that billionaire activist investor Carl Icahn has bought, and one stock that he recently dumped. (Photo: AP)

So far this year, $160.05 billion in U.S. mergers and acquisitions have been announced, the highest value for any like period since 2005, according to Dealogic.

Humana (HUM) tumbled 4.98, or 6.4%, to 73.01, the biggest decline among S&P 500 components, after a government agency proposed reimbursing insurance companies for Medicare Advantage, a health-care plan for seniors, at a lower rate than some analysts expected. UnitedHealth dropped 66 cents, or 1.2%, to 56.66 and Cigna (CI) pulled back 65 cents, or 1.1%, to 60.43.

Google (GOOG) added 13.96, or 1.8%, to 806.85, topping $800 for the first time, something few other stocks have done. The search giant's shares are up more than 14% this year.

European markets were broadly higher, with the Stoxx Europe 600 rising 1.1% to a three-week high. The German ZEW survey's economic expectations index for February rose to 48.2, well above forecasts of 35.0.

China's Shanghai Composite slid 1.6% on worries that China's government would take steps to slow the rise in property prices over the coming weeks.

Japan's Nikkei Stock Average slipped 0.3%. The meeting of finance ministers and central bankers from the Group of 20 industrialized and developing countries over the weekend didn't mention Japan as intentionally trying to weaken its currency, as some investors feared.

Front-month March crude-oil futures increased 0.8% to settle at $96.66 a barrel, while February gold futures slipped 0.3% to settle at $1,603.60 an ounce. The dollar weakened against the euro and the yen. The 10-year Treasury note fell in price to yield 2.026%.

Write to Matt Jarzemsky at matthew.jarzemsky@dowjones.com