But Russian news agency reports that two "ballistic objects" had been launched towards the eastern Mediterranean revived concerns about a U.S.-led strike on Syria.
Israel's Ministry of Defense confirmed that Israeli forces and the U.S. Missile Defense Agency had carried out a missile test and said Israel would release further information about the launch soon.
Traders were in optimistic mood after Microsoft (Fortune 500) said it was buying , Nokia's ( )mobile phones business for $7.2 billion and Verizon (Fortune 500) agreed to a $130 billion deal that will see it take full control of , Verizon Wireless.
U.S. stock futures pulled back from earlier highs after the missile reports, though they were still up by roughly 0.7% to 0.9% from Friday's closing levels.
Markets were also being supported by better-than-expected manufacturing data released in Europe and Asia over the long weekend.
Microsoft and Nokia jointly announced late Monday that they had agreed to an all-cash deal worth 5.4 billion euros ($7.2 billion) that would see the software giant buy Nokia's mobile phone business and license many of its patents.
Shares in Nokia soared as much as 48% after the deal was announced.
Investors are also still assessing the transformational Verizon-Vodafone deal that sees Verizon Communications take 100% control of the Verizon Wireless business unit from Vodafone (. Both companies are )hiking their dividends and say the agreement will allow them to focus on their core businesses.
European markets turned negative in morning trading after posting some impressive gains on Monday. The major regional indexes steadied after Israel confirmed the test firing but were still narrowly weaker.
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