U.S. stocks rose on Friday as news from Merck soothed worries about the corporate cost of healthcare reform and energy shares were boosted by higher oil prices.
Merck & Co jumped 5.6 percent to $35.64, making it the top gainer on the Dow. The company said its costs related to U.S. healthcare reform will be a far smaller percentage of total company sales compared with rival drugmakers.
The news helped the sector rebound after a selloff during the past two days as investors feared the impact on profits from the new healthcare overhaul. The S&P healthcare index <.GSPA> was up 1 percent.
On earnings, American Express Co rose 2.5 percent to $47.96 after its results beat expectations and the credit card company struck an optimistic tone about future client spending.
But keeping gains in check was jitters over the high debt loads of some euro zone nations after Greece appealed to its European partners and the International Monetary Fund for emergency loans.
You have Greece on the negative side and earnings on the positive side, so you've got some yin and some yang working there, said Phil Orlando, chief equity market strategist at Federated Investors in New York.
The Dow Jones industrial average <.DJI> added 27.74 points, or 0.25 percent, to 11,162.03. The Standard & Poor's 500 Index <.SPX> rose 3.50 points, or 0.29 percent, to 1,212.17. The Nasdaq Composite Index <.IXIC> edged up 1.16 points, or 0.05 percent, at 2,520.23.
Surprisingly strong earnings have contributed to the market's gains in recent weeks, with the benchmark S&P 500 up 79 percent from the 12-year lows of March 2009.
Oil rose 1.6 percent to above $85 a barrel on positive economic data. The S&P energy index <.GSPE> gained 1.6 percent, while Chevron was up 1.1 percent at $82.09.
The Nasdaq's gains were limited by Qualcomm Inc and Amazon.com , which both gave disappointing forecasts earlier this week. Qualcomm fell 3.6 percent to $37.91 and Amazon was down 4.6 percent at $143.24.
Microsoft Corp Inc fell 1.6 percent to $30.90 after it reported its quarterly profit jumped, but the report failed to meet Wall Street's heightened expectations.
Homebuilders <.DJUSHB> were up 3.3 percent after data showed sales of newly built single-family homes rose last month to their highest level in eight months.
In other data, new orders for durable manufactured goods excluding transportation posted the largest gain in over two years.
That lends further credence to our belief that the manufacturing portion of the economy has already turned for the positive, said Orlando.
(Editing by Kenneth Barry)