NEW YORK (TheStreet) -- Wall Street enjoyed a solid start to May with stocks rebounding on possible deal talks and better-than-expected earnings from the likes of Gilead Sciences (GILD) and CVS Caremark (CVS).
Markets had suffered a tech and biotech selloff on Thursday that saw all of the benchmark indexes tumble 1%.
The S&P 500 added 1.1% and the Nasdaq climbed 1.3%. The Dow Jones Industrial Average gained 1%, or 180 points.
Altera (ALTR) led the Nasdaq higher on reports Intel (INTC) could launch a hostile bid for the chipmaker by June. Intel had signed a standstill agreement with Altera amid previous deal talks which expire on June 1, according to Reuters. Altera spiked 9.8%.
Yum! Brands (YUM) jumped more than 6% after CNBC reported activist investor Corvex has taken a significant position in the fast food chain owner. Shares were already higher after investment firm Third Point disclosed a new position on Thursday based on expectations of a sharp turnaround in profit at Yum!.
CVS Caremark edged higher after reporting quarterly earnings of $1.14 a share, 6 cents better than expected. Revenue of $36.33 billion came in 11.1% higher than a year earlier.
Gilead Sciences gained 4.6% after posting earnings of $2.94 a share in its first quarter, beating estimates by 62 cents. Revenue of $7.6 billion rocketed 52% higher and beat forecasts.
Markets shook off a fresh set of data that pointed to a slowdown in the U.S. economic recovery. U.S. manufacturing activity held at the year's lows in April. Markit revised its index of U.S. manufacturing conditions to 54.1 in April from 55.7 in March as industrial companies continued to hurt from a stronger dollar.
In a separate report, manufacturing activity held at 51.5 in April, its lowest level since May 2013, according to the Institute for Supply Management index. Economists had expected a reading of 52.
"This was a weak report and the absence of any bounce is a clear indication that the U.S. economic recovery has remained mired in a soft patch," said Millan Mulraine, deputy head of U.S. strategy at TD Securities. "We believe that the case for a mid-year (June or July) hike by the [Federal Reserve] is becoming compromised."
Consumer sentiment improved in April with a reading of 95.9, up from 93 in March, according to a University of Michigan survey. The improvement was as expected.
Non-farm payrolls for April will dominate the economic calendar in the week ahead. Economists expect 225,000 jobs to have been added over the month, far better than 126,000 added in March. The unemployment situation report will be out before the bell on Friday.
Other companies moving markets on Friday included Chevron (CVX) which was 1.8% lower after quarterly revenue fell 35.1% from a year earlier due to plunging oil prices. Profit declined at a slower-than-expected pace, though. The oil giant earned $1.37 a share compared to $2.36 a year earlier, beating estimates by 58 cents a share.
LinkedIn (LNKD) tanked more than 18% after lowering its outlook for the year. The networking site guided for second-quarter sales between $670 million and $675 million, below forecasts for $717.5 million.
Visa (V) was 0.4% lower despite beating earnings expectations on the top- and bottom-line. Currency exchange was a major hurdle this quarter, cutting into first-quarter growth by 2.5 percentage points. Over the full year, the stronger dollar is expected to reduce sales by 2%.
Dreamworks Animation (DWA) fell 4.1% after reporting a wider-than-expected loss in its first quarter. Revenue climbed across all operating segments, with library titles such as How to Train Your Dragon 2 contributing significantly to feature film sales.
Charter Communications (CHTR) saw quarterly losses widen to 73 cents a share from 35 cents a year earlier. Analysts expected a loss of 7 cents a share.
Warren Buffett's Berkshire Hathaway (BRK.A) is scheduled to report earnings after markets close on Friday. Thousands of investors in the company are heading to Berkshire's home city of Omaha, Neb., this weekend for the company's annual meeting.
Media companies have their turn to report earnings nest week. Comcast (CMCSA) is scheduled for Monday morning, while DirecTV (DTV), Discovery Communications (DISCA), and Sprint (S) will report Tuesday morning. Walt Disney (DIS) is slated for Wednesday afternoon and Twenty-First Century Fox (FOXA) and CBS Corp (CBS) are due on Wednesday and Thursday afternoon, respectively.