Economy
China's official manufacturing PMI edged up to 50.4 in April from 50.3 in March but slightly missed consensus of 50.5. The data indicates that manufacturing is just about expanding and adds to HSBC's flash PMI reading which shows that the sector is contracting. "The economy is showing slight improvements due to recent policy measures but there is no sign of a bottoming out," says economist Sun Wencun.

U.K. manufacturing PMI rose to 57.3 in April from 55.8 in March and comfortably topped consensus of 55.4. However, there was another sharp slowdown in the growth of new orders for investment goods, which is a blow to the hopes of re-balancing the economy away from its reliance on consumers. Still, the pound took a leap after the data was released and was +0.2% at $1.6909 at the time of writing.

Stocks
AT&T has reportedly approached DirecTV about buying the satellite-TV provider in a deal that could be worth at least $40B. DirecTV, whose market cap is $39.5B, is open to a deal. The combined company would have almost 26M pay-TV subscribers vs the 30M that Comcast (CMCSA) would have if it acquires Time Warner Cable (TWC). As with the Comcast-TWC deal, a major question is whether regulators would authorize a tie-up between AT&T (T) and DirecTV (DTV), whose shares were +4.4% premarket.

Sprint reportedly "plans to push forward" with a bid for T-Mobile USA (TMUS) in June or July after lining up financing from six banks. Spring (S) parent SoftBank (OTCPK:SFTBF) is still talking to T-Mobile parent Deutsche Telekom (OTCPK:DTEGF) about who would run the post-merger company, with outspoken T-Mobile chief John Legere being the top candidate. The latter company's stock jumped 9.25% in post-market trading.

The Nikkei jumped 1.3% and the FTSE 100 was +0.4% at the time of writing as Japanese and U.K. markets traded while much of Asia and Europe enjoyed a day off for May Day. Investors shrugged off sluggish Chinese PMI figures as the Fed's upbeat statement yesterday boosted the mood. In Britain, strong housing and manufacturing PMI data might also be helping.

Merck is reportedly considering a sale of a portfolio of off-patent drugs in a deal that could fetch over $15B and attract interest from generic drugmakers. The report comes as Merck (MRK) holds an auction to offload its $14B consumer healthcare unit. The company's divestment strategy underscores how large pharmaceuticals firms are shedding smaller divisions that they view as non-core.

Sony's preliminary fiscal-year net loss was ¥130B ($1.3B), 18% above a February forecast of ¥110B and far worse than the company's even earlier FY guidance for a profit of ¥30B. In FY 2013, Sony (SNE) made a profit of ¥43B. The company will book additional costs of ¥30B for its PC unit, which it is selling, and ¥25B of charges for its overseas disc manufacturing operations amid falling demand. Shares were -3.3% premarket.

Lloyds' Q1 underlying pretax profit climbed 22% to £1.8B as net interest income rose 10% to £2.81B and impairment charges dropped 57% to £431M, while costs fell 5% to £2.3B. Lloyds (LYG) expects to float 25% of its TSB division by the end of June, and to apply for permission to restart dividend payments in H2. Shares were +4.8% in London at the time of writing.

Endo Health Solutions has agreed to pay $830M to settle 20,000 claims - representing a "substantial majority" of the cases brought - that its vaginal mesh inserts caused injuries. The deal adds to the $54.4M that Endo (ENDP) agreed to pay last year to resolve other claims. Peer device-makers have been facing similar lawsuits as well, including Johnson & Johnson (JNJ) and Boston Scientific (BSX).

The Department of Justice has ended its probe of possible antitrust violations by Chesapeake Energy (CHK) and Encana (ECA) in connection with their land-leasing activities in Michigan in 2010. The DOJ's probe found that Encana "did not engage in collusion with competitors," the company said. However, Chesapeake and Encana still face state charges in Michigan.

LinkedIn, Kraft and Expedia are among the multitude of companies that are due to report their quarterly earnings after the bell today. Analysts expect LinkedIn's (LNKD) Q1 EPS to have fallen to $0.34 from $0.45 but its revenue to have jumped 44% to $466.57M. Kraft's (KRFT) EPS is seen flat at $0.76 as sales slipped 2.1% to 44.45B. Expedia's (EXPE) EPS is forecast to have dropped to $0.15 from $0.25 even though revenue is estimated to have climbed 16.6% to $1.18B.

Abercrombie & Fitch has nominated four new independent directors as part of a peace deal with activist investor Engaged Capital, which had been agitating for an overhaul. Four current directors will make way for the new board members. Abercrombie & Fitch (ANF) CEO Mike Jeffries looks set to keep his job even though Engaged had wanted to replace him amid falling sales. Shares were +1.5% premarket.

Today's economic calendar:

Auto sales
7:30 Challenger Job-Cut Report
8:30 Initial Jobless Claims
8:30 Personal Income and Outlays
8:30 Gallup US Payroll to Population
8:30 Janet Yellen speech
9:45 Bloomberg Consumer Comfort Index
9:45 PMI Manufacturing Index
10:00 ISM Manufacturing Index
10:00 Construction Spending
10:30 EIA Natural Gas Inventory
4:30 PM Money Supply
4:30 PM Fed Balance Sheet

Notable earnings before today's open: AAWW, ABMD, ACIW, AFSI, AIT, AMT, ANR, ANSS, ARG, AVP, BBW, BDC, BDX, BG, BGCP, BKCC, BLL, BWA, BZH, CAH, CHD, CI, CIE, CLX, CME, CNP, CNSL, COP, CPN, CRCM, CVI, CVRR, DIN, DPZ, ENDP, EPD, EXAS, FCH, FCN, FIG, FIS, FSS, FUR, GG, GNRC, GWR, HAR, HEP, HSNI, HST, I, IART, IDA, IDCC, IIVI, INCY, IQNT, IRDM, IRM, IT, ITC, ITT, IVZ, JAH, K, KMT, LAZ, LINE, LLL, LM, MA, MD, MDC, MFA, MFC, MPC, MPLX, MSI, MTOR, MWW, MYL, NGLS, NILE, NNN, NVO, O, OAK, OCN, OGE, PCG, PCRX, PEG, PMC, PPL, PRLB, PTRY, PWE, PWR, Q, RFP, RGLD, RRD, SBH, SFY, SHOO, SHPG, SMP, SNMX, STRZA, SWC, TEVA, THRM, TMUS, TXT, UAN, UPL, VG, VIAB, VICL, WLT, WWE, XEL, XOM, YRCW

Notable earnings after today's close: ABFS, ABTL, ACGL, ADNC, ADUS, AEM, AFFX, AHS, AIV, AKAM, ALDW, ALJ, AVD, BAGL, BBG, BCOR, BJRI, BKH, BMRN, BYI, CALD, CERS, CHGG, CPSI, CSOD, CTCT, CTRL, CUBE, CVD, DCT, DGI, DRC, DVA, DXCM, EGO, EHTH, ELLI, ENTR, EPAY, EXEL, EXPE, FI, FLR, FLT, GERN, HCI, HME, HT, HTCH,