Stocks pulled off a gain after a wobbly session Thursday as banks rose and some better-than-expected earnings helped offset gloomy economic data.
The Dow Jones Industrial Average gained more than 70 points, or 0.9 percent. The S&P 500 also rose 0.9 percent, while the Nasdaq added 0.4 percent.
Today's gyrations followed a turbulent session Wednesday that left the Dow down about 1 percent. The tech-heavy Nasdaq, however, eked out a gain of 0.1 percent.
"I think there's nervousness back in the market," Art Cashin, director of floor operations at UBS, told CNBC. "The next several days will tell us whether it's going to be a significant pullback or just a cleanup of the overbought condition ... I'm leaning toward a significant pullback," he said.
“We need about two to four weeks to recharge the batteries of the market … then we’ll be ready for the next leg higher,” Paul Schatz, president of Heritage Capital, told CNBC.
Most of the earnings of the past two days came in better than expected, which helped buoy the market.
Apple shares rose 3.2 percent after the technology giant late Wednesday delivered solid earnings, which showed sales of iPhones and iPods topped forecasts.
Fifth Third also beat expectations, with a loss of 4 cents a share. Analysts had expected a more severe 27-cent loss. Its shares climbed 3.5 percent.
Most bank stocks rallied: Bank of America rose 6.8 percent, JPMorgan added 4.1 percentand Wells Fargo shot up 11 percent. But Citigroup slipped 1.5 percent.
Online auctioneer eBay reported its earnings fell but still beat expectations, sending the stock up 13 percent.
Defense contractor Raytheon said its profit grew 14 percent in the first quarter. Shares advanced 6.6 percent.
Hershey gained 3.9 percent after the chocolatier reported its earnings rose more than expected, helped by price increases and market-share gains.
Radio Shack soared 15 percent after the struggling electronics retailer beat its target, helped by sales of digital-converter boxes.
But United Parcel Service, a bellwether for the economy, missed analysts' target. The package-delivery giant said the weak economy was dampening demand for the delivery service. UPS shares lost 2.6 percent.
And economic data cast a shadow over the market: Existing-home sales dropped 3 percentto a 4.57 million annual rate in March, lower than the 4.7-percent pace expected and February's downwardly revised 4.71-million rate. Initial jobless claims rose by 27,000last week. The four-week moving average declined slightly but continuing claims shot up to a record 6.137 million.
General Electric shares climbed 0.7 percent after a contentious shareholder meeting in which shareholders blasted CEO Jeff Immelt for the 68-percent dividend cut. GE is the parent of CNBC.
The auto sector remained in flux as the government wrangled with the struggling sector. US taxpayers are now likely to own a large stake inGeneral Motors as the government could convert a $13.4 billion loan into common stock. The move could reduce the company's debt burden.
Meanwhile, Chrysler’sloans could also be converted into stock under Treasury plans, sources told Reuters. The Treasury offered the lenders $1.5 billion of first-lien debt and a 5 percent equity stake in the company in exchange for about $7 billion of debt they currently hold, according to the sources.
And Fiat is apparently in talks to buy GM's Opel unit, though that is contingent on the outcome of its talks with Chrysler, the Wall Street Journal reported.
Among the other buzz in the market, Bank of America CEO Ken Lewis claims to have come under pressure from Federal Reserve Chairman Ben Bernanke and former Treasury Secretary Henry Paulson to keep quiet about the problems at Merrill Lynch and BofA, the Wall Street Journal reported.
Johnson & Johnson rose 0.4 percent after the band-aid and baby-shampoo maker raised its dividend by 6.5 percent to 49 cents a share from 46 cents a share.
Still to Come:
THURSDAY: Earnings from Microsoft, Amazon, AmEx and Burlington Northern after the bell
FRIDAY: G-7 meeting in Washington; durable-goods orders; new-home sales; Earnings from 3M, Honeywell, Schlumberger and Xerox
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