* S&P 500 hits record, Nasdaq at 14-year high
* Insurance stocks rise after Humana comments
* Men's Wearhouse raises offer for Jos. A. Bank
* Indexes up: Dow 1.1 pct, S&P 1.2 pct, Nasdaq 1.1 pct
NEW YORK, Feb 24 (Reuters) - U.S. stocks jumped 1 percent on Monday, with the S&P 500 climbing to an all-time high as optimism over merger activity helped Wall Street erase this year's early weakness.
Gains were broad, with nine of the 10 S&P 500 sectors up on the day and a number of bellwethers, including Caterpillar Inc and Merck & Co, hitting 52-week highs.
With the day's gains, the S&P 500 turned positive for the year while the Nasdaq hit a 14-year high. More than two-thirds of companies traded on the New York Stock Exchange rose on the day, while 63 percent of Nasdaq-listed companies gained.
"People are recognizing that while some economic data has been muted, there is still a lot of value in the market based on corporate cash positions and multiples. From a perspective of overall fundamentals, things look pretty good, especially relative to other asset classes," said Matthew Keator, partner in the Keator Group, a wealth management firm in Lenox, Massachusetts.
RF Micro Devices Inc agreed to buy TriQuint Semiconductor Inc for about $1.6 billion, while Men's Wearhouse Inc raised its cash tender offer for rival men's clothing retailer Jos. A. Bank Clothiers Inc to $63.50 per share from $57.50.
Shares of RF climbed 16 percent to $6.77 while TriQuint gained 22 percent to $11.25. Men's Wearhouse rose 7.2 percent to $48.38 while Jos. A. Bank was up 8.4 percent at $59.65.
Humana Inc and UnitedHealth Group were both among the S&P's biggest percentage gainers, with Humana up 8.2 percent to $111.24 after it said the government's proposed cuts to the private Medicare program appeared to be less than it had forecast. UnitedHealth rose 3 percent to $75.99.
Aetna Inc rose 2.4 percent to $72.14 after giving a 2014 earnings outlook.
The Dow Jones industrial average was up 181.61 points, or 1.13 percent, at 16,284.91. The Standard & Poor's 500 Index was up 21.09 points, or 1.15 percent, at 1,857.34. The Nasdaq Composite Index was up 45.62 points, or 1.07 percent, at 4,309.03.
Despite the day's gains, many investors were concerned that markets were becoming over-valued as recent economic data failed to meet expectations, though the weak data has largely been blamed on harsh winter weather rather than worsening fundamentals.
"Seeing merger activity is a good sign for a continued growth market, but we've started to taper back our domestic holdings in favor of international markets which seem cheaper given the S&P's (price-to-earnings ratio)," said Paul Radeke, vice president at the Minneapolis-based KDV Wealth Management, which has about $660 million in assets under management.
Overseas markets remained in focus after Ukrainian President Viktor Yanukovich was ousted following deadly street protests, leaving a potential power vacuum and an ailing economy. Ukraine's finance ministry said the economy required $35 billion in foreign aid over the next two years, with the first tranche needed within two weeks.
While most U.S. companies have limited direct exposure to Ukraine, investors worry that the instability in the region could spread throughout emerging markets.
In the latest U.S. data, the Chicago Fed National Activity index fell to -0.39 in January from 0.16 in December while financial data firm Markit's preliminary February read on the services sector fell to 52.7 from 56.7.
Pfizer Inc shares rose 1.7 percent to $31.98 after the company said that its drug Prevenar 13 prevented community-acquired pneumonia in individuals age 65 and older in a study.
Many traders are looking ahead to Thursday, when Federal Reserve Chair Janet Yellen will speak to the Senate Banking Committee in her semi-annual testimony about monetary policy.
Yellen's comments will be scoured for insight into the extent to which bad weather has impacted economic activity, as well as for confirmation that the Fed will not make any changes to its schedule for trimming stimulus.