Global stock markets rose on Tuesday as U.S. stocks were boosted by news of yet another possible merger that suggested there is still room to the upside, while a pick-up in German economic sentiment supported European stocks.

The S&P 500 Index, hovering near a five-year high, extended its seven-week winning streak. The benchmark index is already up more than 7 percent for the year.Office Depot Inc, the No. 2 U.S. office supply retailer, and smaller rival OfficeMax Inc are said to be in advanced merger talks.

A deal would be the latest addition to more than $158 billion in U.S. deals announced thus far in 2013. Last week, Berkshire Hathaway and a partner agreed to acquire H.J. Heinz Co, and General Electric sold its remaining stake in NBCUniversal to Comcast Corp.

"Deals are good for the market," said Frank Lesh, a futures analyst and broker at FuturePath Trading LLC in Chicago. "The fact that they're being done is a positive."European shares rebounded on Tuesday from three days of losses, with stronger-than-expected German sentiment data prompting investors to return to sectors like autos and technology.Optimism that the worst of the euro zone debt crisis is over has helped German investor and analyst sentiment soar to its highest level in nearly three years this month.

In the currency market, the yen climbed after two days of losses. Japanese Finance Minister Taro Aso said he was not considering foreign bond purchases.

Further boosting the U.S. market, Google shares hit an all-time high of $807.00. The stock closed up 1.8 percent at $806.85.Office Depot rose 9.4 percent to $5.02 and OfficeMax shares jumped 21 percent to $13.00. Shares of larger rival Staples Inc shot up 13 percent to $14.65.

MSCI's world equity index rose 0.8 percent, though markets have been falling for two weeks since a big run-up in January.

The Dow Jones industrial average ended up 53.91 points, or 0.39 percent, at 14,035.67. The Standard & Poor's 500 Index was up 11.15 points, or 0.73 percent, at 1,530.94. The Nasdaq Composite Index gained 21.56 points, or 0.68 percent, at 3,213.59.The pan-European FTSEurofirst 300 index provisionally closed up 1.1 percent at 1,171.73 - more than recovering the previous three sessions' losses.