Winning day on Wall Street

NEW YORK (CNNMoney.com) -- Wall Street rebounded from a sharp selloff late last week to finish higher Monday, following a flurry of deals and positive earnings news from the drugmaker Merck.

The Dow Jones industrial average (up 92.34 to 13,943.42, Charts) soared by as much as 122 points, but finished up 92 points, or nearly 0.7 percent, bouncing back from its 150-point loss last Friday.

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The broader S&P 500 (up 7.47 to 1,541.57, Charts) jumped nearly 0.5 percent, while the tech-fueled Nasdaq (up 2.98 to 2,690.58, Charts) rose just 0.1 percent.

Last week's selloff and Monday's nearly 100 point gain, has become commonplace in recent weeks as Wall Street has struggled with corporate earnings, the subprime mortgage sector and interest rates.

Todd Leone, head trader at Cowen & Co., suspected that the recent volatility would not dissapear anytime soon, or at least until Wall Street returns from summer vacation in September.

"Part of it is that 100 points isn't that big of a move anymore," he said. "I think the market is just trying to find a range to trade within."

Merger activity helped send stocks higher Monday including a merger of the offshore drilling firms Transocean (Charts) and rival GlobalSantaFe (Charts), giving the companies a combined market capitalization of about $48 billion.

Private equity firm Cerberus Capital Management also announced a $4 billion deal for the equipment rental company United Rentals (Charts), representing a 6.6 percent premium to the company's Friday closing price.

Better than expected earnings news from Dow component Merck also provided support to stocks in a session with no major economic reports on tap.

Merck (Charts, Fortune 500) shares finished nearly 7 percent higher after the company reported a 12 percent increase in profits and raised its 2007 earnings forecast.

Wall Street got more earnings news after the closing bell Monday as credit card issuer American Express Co. (Charts, Fortune 500) reported better than expected profits but disappointing revenue numbers, sending its shares lower in after hours trade.

Tech bellwether Texas Instruments Inc. (Charts, Fortune 500) reported lower profits and revenue, hurt by weak demand for its calculators, sending its shares nearly 4 percent lower in after-hours trade.

Online DVD rental company Netflix (Charts) surprised Wall Street by reporting higher profits late Monday. Its shares tumbled by 12 percent in regular trade on news that the cut prices on two of its subscription plans by $1.

Through the market close, the second quarter earnings season has gone rather well. To date, 129 companies - just over a quarter of the S&P 500 - have reported quarterly results, with 60 percent of those firms beating Wall Street projections, according to Thomson First Call.

Wall Street will have plenty of more earnings news to look forward to Tuesday as Dow components DuPont (Charts, Fortune 500) and McDonald's (Charts, Fortune 500) are both set to report results before the opening bell. Online retailer Amazon.com (Charts, Fortune 500) is set to deliver its earnings after the closing bell.

No major economic reports are slated for release Tuesday.

In other corporate news, British bank Barclays (Charts) sweetened its takeover offer for ABN Amro (Charts) to $93 billion, although the new offer still falls short of the bid from a rival group led by Royal Bank of Scotland.

Computer maker Hewlett-Packard (Charts, Fortune 500) announced plans Monday to purchase Opsware Inc. (Charts) for $1.6 billion, in an effort to expand its business software holdings.

Oil prices fell sharply, as U.S. light crude for September lost 90 cents to $74.89 a barrel on the New York Mercantile Exchange.

Treasury prices were little changed, leaving the yield on the 10-year note at 4.95 percent, the level reached late Friday. Bond prices and yields move in opposite directions.

The dollar was stronger against the euro and the yen. COMEX gold for August fell $3.20 to $681.50 an ounce.

Market breadth was positive. Decliners barely beat advancers on the New York Stock Exchange on volume of 1.52 billion shares. Losers edged out winners on the Nasdaq by 8 to 7 on volume of 2.07 billion shares.