By STAN CHOE
AP Business Writer

NEW YORK (AP) — Corporate deals and strong earnings have propelled stocks higher in recent months, and more of each came on Tuesday.

Microsoft Inc. said it would buy Internet telephone service Skype for $8.5 billion in cash. Companies have built up a record amount of cash since the recession and have begun to use it to purchase rivals, pay dividends and buy back their own stock. Microsoft had $50.15 billion in cash and short-term investments at the end of March.

Large companies want to put their cash stockpiles to work because they're getting minimal returns on them, said Oliver Pursche, president of Gary Goldberg Financial Services.

"The crisis is behind us, where we don't need this much cash anymore," he said.

The Skype purchase is Microsoft's largest in its 36-year history. It follows AT&T Inc.'s announcement in March that it would buy T-Mobile USA for $39 billion and Johnson & Johnson's $21.3 billion deal last month to acquire Synthes, a maker of orthopedic instruments.

Dairy producer Dean Foods Co. jumped 15.1 percent after its earnings came in above analysts' expectations. Dean had a stronger start to the year than it expected and raised its forecast for full-year earnings.