NEW YORK (TheStreet) -- U.S. stocks gained Monday as small-cap and tech stocks surged against a backdrop of mixed M&A success. Talks between AstraZeneca(AZN) - Get Report and Pfizer(PFE) - Get Report appeared to have broken down and sentiment was cool over an AT&T (T) - Get Report and DirecTV (DTV) merger agreement. Chinese authorities are also cracking down on the shadow-banking system in the world's second-largest economy, denting shares in Asia.

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A lackluster first-quarter earnings season is wrapping up in the U.S. With more than 90% of companies having posted results, profit gains among S&P 500 stocks are up just more than 2% from a year earlier, according to FactSet.

  • The Dow Jones Industrial Average added 0.15% to 16,516.46, while the S&P 500 was up 0.4% to 1,885.45. The Nasdaq jumped 0.88% to 4,126.40.
  • AT&T shares dropped 0.98% and DirecTV lost 1.8% after the two entered an agreement for AT&T to buy DirecTV for $48.5 billion.
  • AstraZeneca tumbled 12% after rejecting what Pfizer said would be its final offer for the British rival. AstraZeneca said the sweetened offer of 55 pounds ($95.52) a share undervalued the company. Pfizer was up 1.03%.
  • Campbell Soup(CPB) - Get Report stumbled 2.4% lower after cutting sales guidance for fiscal 2014.
  • Internet stocks such as Netflix(NFLX) - Get Report, Google(GOOG) - Get Report and Facebook(FB) - Get Report increased, up 4.2%, 1.6% and 2.1%, respectively. Small-cap stocks as measured by the Russell 2000 popped 1%.
  • European markets were mixed. The DAX closed 0.31% higher and the FTSE lower by 0.16%. Asian markets were also weak, down on headlines that the Chinese government may tighten interbank lending to reduce the risks associated with the shadow banking system. The Hong Kong Hang Seng settled down 0.04% and the Nikkei 225 fell 0.64%. The Shanghai Composite declined 1.05%.
  • San Francisco Fed President John Williams said Monday that the central bank has been looking for ways to implement rate hikes and exit plans without causing disturbing inflation levels.

-- By Jane Searle, Andrea Tse and Joe Deaux in New York

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