* West holds off on more severe sanctions against Russia
* Facebook buys Oculus for $2 billion
* King Digital falls in trading debut
* Unemployment to fall below 6 pct in 2014-Fed's Bullard
* Dow, S&P 500 and Nasdaq all rise 0.4 pct (Updates to open)
By Ryan Vlastelica
NEW YORK, March 26 U.S. stocks rose on Wednesday as geopolitical tensions over Ukraine appeared to ease and the latest U.S. economic data pointed to improving conditions.
Gains were broad, with nine of the S&P 500's ten primary sectors higher on the day. The biggest advancing sectors were healthcare and telecom, two groups that are considered defensive plays.
Russia and the West drew a tentative line under the Ukraine crisis after U.S. President Barack Obama and his allies agreed to hold off on more damaging economic sanctions unless Moscow goes beyond the seizure of Crimea, as Russian President Vladimir Putin last week said he didn't want to do.
The development seemed to limit the odds that the biggest East-West conflict since the Cold War could escalate further, removing a potential headwind from markets. While few U.S. companies have direct exposure to the region, investors had been worried about any fallout from prolonged tensions.
"I would be shocked if there was any kind of escalation now, which eliminates some of the concerns people had and forces the market to focus back on the economy, where recent data has been lending credence to the theory that some recent issues were related to weather, not fundamentals," said Malcolm Polley, president and chief investment officer of Stewart Capital Advisors in Indiana, Pennsylvania.
Orders for durable goods rose more than expected in February, ending two straight months of declines. Separately, private-sector economic activity accelerated in March at a faster clip than in February as the services sector picked up, according to financial data firm Markit's preliminary composite Purchasing Managers Index.
Facebook Inc said late Tuesday it would buy Oculus VR Inc, a maker of virtual-reality glasses for gaming, for $2 billion. The acquisition follows Facebook's $19 billion deal to buy WhatsApp in February. Shares of the social networking giant fell 2.4 percent to $63.38.
Shares of King Digital Entertainment Plc, maker of the wildly popular "Candy Crush Saga" game, fell 9.5 percent to $20.31 in its trading debut on Wednesday, after the company's initial public offering valued it at about $6 billion. The stock was the most actively traded on the New York Stock Exchange.
The Dow Jones industrial average was up 58.57 points, or 0.36 percent, at 16,426.45. The Standard & Poor's 500 Index was up 7.01 points, or 0.38 percent, at 1,872.63. The Nasdaq Composite Index was up 16.98 points, or 0.40 percent, at 4,251.25.
Biotech shares continued to be volatile, with the Nasdaq biotechnology sector index up 1.7 percent. The group has been one of the market's most active in recent sessions as it fell on heavy profit taking last week, then barely ended a four-day losing streak on Tuesday. Gilead Sciences rose 2.4 percent to $74.77 while Regeneron Pharmaceuticals was up 2 percent to $315.
Insmed Inc fell 11 percent to $16.34 after the company said its only experimental drug failed to meet the main goal of a mid-stage trial on patients with a form of bacterial lung infection.
Toyota Motor Corp will buy back up to 1.89 percent of its shares worth up to $3.5 billion in the automaker's biggest buyback in more than a decade. U.S. shares of the company rose 2.2 percent to $110.89.
Clothing company PVH Corp, which owns such brands as Tommy Hilfiger and Calvin Klein, late Tuesday issued an adjusted full-year profit forecast that beat expectations. Shares rose 6.1 percent to $124.44 as the biggest gainer on the S&P 500.
James Bullard, president of the Federal Reserve Bank of St. Louis, said the outlook for the U.S. economy was "quite good," and that he expected the unemployment rate to fall below 6 percent this year. (Editing by Bernadette Baum)