Mergers and acquisitions dominated headlines during the week as the S&P 500 ended above 1,500 for the first time in seven years and came within striking distance of an all-time closing high of 1,527.46 set in March 2000.
"Merger activity is one of the things that's driving the strength in this market," said Ted Weisberg, president of Seaport Securities.
The major markets rose for the fourth straight week and the Dow Jones Industrial Average ended the week up 1.1%, outpacing gains of 0.8% and 0.6% for the Nasdaq and the S&P 500, respectively.
The major markets ended lower on Monday due to weakness in technology stocks, but the Dow still managed to end April with the best monthly performance in more than three years.
Verizon Communications said Monday that earnings fell 8.4% in the first quarter, but the company still managed to beat analysts' consensus forecasts amid revenue growth of 17%.
On Tuesday, the Dow closed at a new record following encouraging economic data and merger news. The ISM manufacturing index rose to its highest level in 11 months, calming fears of slowing U.S. economic growth.
"We're getting that soft landing scenario people were hoping for -- inflation pressures are starting to ease," said Thomas Higgins, chief economist at Payden & Rygel. "It looks like the economy is going to avoid a recession, which is good for stocks."
Rupert Murdoch's media conglomerate News Corp. submitted a $5 billion bid for the publisher of the Wall Street Journal, launching Dow Jones shares to big gains. CNBC's David Faber was the first to report on the unsolicited buyout offer of $60 a share.
Markets were buoyed by strong gains in financial stocks on Wednesday, including MasterCard and American Express. The Dow closed at another record.
"With strong earnings and reasonable valuations, you should expect stocks to go higher," said Edward Keon, chief investment strategist at Prudential. "There's always some reason to worry things get worse, but so far those worries have turned out to be unproven."
Cablevision Systems shares jumped 9% after the company's board agreed to be taken private following a sweetened buyout offer from the Dolan family, who are majority shareholders of the cable services firm and the operators of Madison Square Garden.
On Thursday, the S&P 500 index closed above the 1,500 level for the first time in nearly seven years, but overall gains were modest amid concern the market may be reaching a top.
Shares of Symantec, the world's largest security software maker, rose more than 4% after reporting fourth-quarter earnings above expectations. General Motors fell after posting earnings well below the Wall Street forecast due to continued weakness in North American auto sales.
Stocks closed with mild gains in a seesaw trading session Friday as investors bid up shares of Yahoo following reports that the Internet company was being courted by software giant Microsoft.