Wall Street rebounded Friday from earlier losses on reports that US President Joe Biden will seek a huge tax hike, but Europe remained on the back foot despite bright economic data.

Wall Street's main indices had ended Thursday down nearly one percent after the first reports broke of the possible hike that would cut into earnings made on selling stocks.

But after a mixed start on Friday, major indices pushed higher and finished with solid gains. The broad-based S&P 500 gained 1.1 percent.

"US markets appear to be recovering some of their equilibrium after yesterday's losses, helped by strong economic data, from March new home sales and solid" PMI surveys of business activity, said Michael Hewson, chief market analyst at CMC Markets UK.

US stocks still finished the week modestly in the red, but Friday's gains cut into the losses.

Wall Street pulled back at the beginning of the week despite mostly strong earnings as investors pondered whether stocks have much more upside after a series of records in early 2021.

In, Europe, stocks mostly fell, despite bright survey data for the region.

London stocks ended the day flat, while Paris dipped 0.2 percent and Frankfurt shed 0.3 percent.

"It's been a lackluster end to what has been a negative week for European stocks, with concerns about surging Covid-19 infection rates in Asia weighing on sentiment over the past few days," said Hewson.

Asian share prices struggled to find clear direction.

Eurozone economic recovery accelerated somewhat in April despite Covid restrictions, a key survey showed Friday, as business activity grew at its fastest pace since the summer thanks to a manufacturing boom.

IHS Markit's eurozone composite Purchasing Managers' Index (PMI), a key gauge of business activity, rose to 53.7 points in April from 53.2 in March, remaining above the 50-point level that indicates growth.

It marked a second straight month of expansion in business activity after four consecutive months of decline.

Britain's composite PMI surged in April to 60 points on the back of the nation's easing Covid restrictions.

That marked the highest level since late 2013, and compared with 56.4 in March.

Tax hike talk has upset the markets
Tax hike talk has upset the markets GETTY IMAGES NORTH AMERICA / SPENCER PLATT

However, European shares failed to win much traction from the news.

New York - Dow: UP 0.7 percent at 34,043.49 (close)

New York - S&P 500: UP 1.1 percent at 4,180.17 (close)

New York - Nasdaq: UP 1.4 percent at 14,016.81 (close)

London - FTSE 100: FLAT at 6,938.56 (close)

Frankfurt - DAX 30: DOWN 0.3 percent at 15,279.62 (close)

Paris - CAC 40: DOWN 0.2 percent at 6,257.94 (close)

EURO STOXX 50: DOWN less than 0.1 percent at 4,013.34 (close)

Tokyo - Nikkei 225: DOWN 0.6 percent at 29,020.63 (close)

Hong Kong - Hang Seng Index: UP 1.1 percent at 29,078.75 (close)

Shanghai - Composite: UP 0.3 percent at 3,474.17 (close)

Euro/dollar: UP at $1.2096 from $1.2015

Pound/dollar: UP at $1.3877 from $1.3839

Euro/pound: UP at 87.16 pence from 86.82 pence

Dollar/yen: DOWN at 107.89 yen from 107.97 yen

Brent North Sea crude: UP 1.1 percent at $66.11 per barrel

West Texas Intermediate: UP 1.2 percent at $62.14 per barrel