Wall Street rallies 1% on upbeat earnings, tech strength

Wall Street’s main indexes rallied on Thursday as a surge in technology stocks and strong quarterly results helped investors to look away from inflation concerns.

The biggest boost came from growth names including Facebook Inc, Microsoft Corp, Inc, Tesla Inc, Apple Inc and Google-parent Alphabet, which rose more than 1 per cent.

Bank of America gained 1.3 per cent as its profit topped market expectations, helped by the release of reserves to cover loan losses.

UnitedHealth Group Inc jumped about 5 per cent to top the S&P 500 and the Dow, after the health insurer raised its full-year adjusted profit forecast on strength from its Optum unit that manages drug benefits.

“Heading into this third quarter reporting period, the market was experiencing weakness … a lot of analysts were worried that earnings might end up disappointing,” said Sam Stovall, chief investment strategist at CFRA.

“This could be the buy the dip, we are in the beginning of what is traditionally a seasonally favorable period for the market. We could end up with a nice run between now and the end of the year.”

Analysts expect corporate America to report strong quarterly profit growth and will focus on commentary from companies on how they are going to battle rising costs, labor shortages and supply chain disruptions.

Meanwhile, data showed the number of Americans filing new claims for unemployment benefits fell close to a 19-month low last week, while a separate report showed producer prices accelerated 8.6 per cent in the 12 months through September.

The reports come a day after consumer prices rose solidly in September, which further strengthened case for a interest-rate hike by the Federal Reserve.

St. Louis Fed Bank President James Bullard said his outlook for U.S. economy is pretty bullish, while putting a 50 per cent chance on high levels of inflation persisting.

At 10:09 a.m. ET, the Dow Jones Industrial Average was up 385.38 points, or 1.12 per cent, at 34,763.19, the S&P 500 was up 54.02 points, or 1.24 per cent, at 4,417.82, and the Nasdaq Composite was up 198.90 points, or 1.36 per cent, at 14,770.53.

All of the 11 major S&P sectors advanced in early trading, with healthcare and technology leading the gains.

Banking stocks came under pressure as investment bank Morgan Stanley, Wells Fargo and Citigroup slipped despite reporting strong quarterly performances.

Domino’s Pizza Inc slipped 1.5 per cent after the pizza chain reported a surprise drop in U.S. same-store sales on a slowdown in demand for deliveries.

Advancing issues outnumbered decliners by a 5.48-to-1 ratio on the NYSE and 3.24-to-1 ratio on the Nasdaq.

The S&P index recorded 26 new 52-week highs and no new lows, while the Nasdaq recorded 46 new highs and 12 new lows.

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