Wall Street rebounds ahead of tech earnings, upbeat U.S. data helps
NEW YORK (Reuters) – U.S. stocks advanced on Thursday as investors piled into technology heavyweights ahead of their earnings reports, while upbeat domestic economic data calmed widespread concerns about surging coronavirus cases.
The rebound came after a more than 3% slide a day earlier in Wall Street’s major indexes, underscoring heightened market volatility ahead of the presidential election next week.
“It’s a big day in technology today in anticipation of their results,” said Tim Ghriskey, chief investment strategist at Inverness Counsel in New York.
“The earnings season so far has resulted in significant positive earnings surprises. We think that’s helping to fuel today’s rally in anticipation of positive surprises from these companies.”
Apple Inc AAPL.O, Amazon.com Inc AMZN.O and Alphabet Inc GOOGL.O rose before their results, due after the closing bell. All three companies have seen demand surge for their products and services from people stuck at home during the pandemic.
Apple, one of the most actively traded stocks on Nasdaq, jumped 4.6%.
Facebook Inc FB.O and Twitter Inc TWTR.N, which will also report later in the day, jumped about 5% and 7%, respectively, after Pinterest Inc PINS.N forecast a rebound in ad spending. Shares of the image-sharing company soared more than 28%.
The NYSE FANG+TM Index .NYFANG jumped 3.2%. Communication services .SPLRCS, materials .SPLRCM and technology .SPLRCT rose the most among major S&P sectors.
Sentiment also got a boost from data showing the U.S. economy grew at a record pace in the third quarter after the government poured out more than $3 trillion of pandemic aid. A separate report showed weekly unemployment claims fell last week.
“It’s positive data, but it’s a little bit backward looking because you have COVID-19 cases on the rise again which doesn’t really send a strong signal about the fourth quarter,” said Shawn Snyder, head of investment strategy at Citi Personal Wealth Management in New York.
The CBOE volatility index .VIX has surged to a 15-week high this week due to lack of fiscal stimulus, while the White House coronavirus task force urged for aggressive measures to curb the pandemic.
Democratic challenger Joe Biden holds a comfortable lead over President Donald Trump in national polls, but the race in battleground states that will likely decide the election are tighter than the national surveys.
At 2:15 p.m. ET (1815 GMT), the Dow Jones Industrial Average .DJI rose 329.25 points, or 1.24%, to 26,849.2, the S&P 500 .SPX gained 60.3 points, or 1.84%, to 3,331.33 and the Nasdaq Composite .IXIC added 243.38 points, or 2.21%, to 11,248.24.
Coach owner Tapestry Inc TPR.N climbed 4% as it beat quarterly profit estimates and forecast growth for the year as demand for luxury handbags and apparel rebounded in China from pandemic lows.
Advancing issues outnumbered declining ones on the NYSE by a 2.12-to-1 ratio; on Nasdaq, a 1.83-to-1 ratio favored advancers.
The S&P 500 posted four new 52-week highs and 10 new lows; the Nasdaq Composite recorded 21 new highs and 66 new lows.
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