Wall Street gains as social media, Internet stocks rebound

NEW YORK (Reuters) - Stocks rose on Tuesday, rebounding after three days of declines, as investors bought beaten-down shares of social media and Internet companies.

The day's biggest gainers included Amazon.com Inc up 2.3 percent at $324.99, Yahoo! Inc up 3 percent at $34.05, and LinkedIn Corp rose 4.5 percent to $166.78.

The Global X social media index rose 3.1 percent to 18.64.

Biotechnology stocks also reversed earlier losses, with the Nasdaq biotechnology index <.NBI> up 0.2 percent at 2,372.38. But Gilead Sciences Inc was among the biggest decliners on the S&P 500, down 2.2 percent at $70.64.

The day's gains follow the S&P 500's biggest three-day retreat since late January and the Nasdaq's steepest three-day drop since November 2011.

"The put/call ratio for the SPDR S&P 500 ETF Trust finished (Monday's) session at 2.4, which is near an extreme-high level for 2014," said Bryan Sapp, senior trading analyst at Schaeffer's Investment Research in Cincinnati, Ohio.

"This is a good quantification of near-extreme fear, and previous readings around these levels have marked short-term bottoms for the S&P 500."

The benchmark S&P index rebounded on Tuesday, above its 50-day moving average around 1,840, a support level which could trigger more declines if convincingly broken. The index has managed to stay above 1,840 several times over the past month.

The Dow Jones industrial average <.DJI> was up 47.10 points, or 0.29 percent, at 16,292.97. The Standard & Poor's 500 Index <.SPX> was up 7.86 points, or 0.43 percent, at 1,852.90. The Nasdaq Composite Index <.IXIC> was up 39.44 points, or 0.97 percent, at 4,119.20.

Earnings season gets under way this week, with results due from companies including Alcoa Inc after the close and retailer Bed, Bath & Beyond on Wednesday. Financials JPMorgan Chase & Co and Wells Fargo & Co will release results on Friday.

S&P 500 companies' first-quarter earnings are projected to have increased just 1 percent from a year ago, Thomson Reuters data showed. The forecast is down sharply from the start of the year, when profit growth was estimated at 6.5 percent.

A lackluster first-quarter earnings season hurt by a harsh winter could spark a pullback, some analysts said, with investors expressing optimism for the second quarter as the weather improves.

Takeda Pharmaceutical Co Ltd <4502.T> said it would contest $6 billion in punitive damages imposed by a U.S. federal jury in a case alleging Japan's largest drugmaker had concealed cancer risks associated with its Actos diabetes drug. Eli Lilly and Co , Takeda's co-defendant in the case, was ordered to pay $3 billion in punitive damages.

Eli Lilly shares were up 0.4 percent at $58.84.

Gigamon Inc slumped 31.5 percent to $17.95. The maker of network traffic management software estimated lower-than-expected first-quarter revenue.

Alkermes Plc was a bright spot among biotechs, up 3.6 percent to $42.61 after the company said its experimental drug to treat the symptoms of schizophrenia met the main goal in a late-stage study.

(Editing by Nick Zieminski and Bernadette Baum)

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