Wall St. tech rally gets a boost from China rate cut

By Abhiram Nandakumar

(Reuters) - All three major U.S. indexes rose to more than two-month highs on Friday, after a surprise rate cut in China amplified a rally driven by strong results from Microsoft, Alphabet and Amazon.

Microsoft's shares rose 11.61 percent to $53.61, their highest in 15 years, after the company's adjusted revenue beat expectations for the ninth quarter in a row.

Microsoft gave the biggest boost to the three indexes, accounting for about a third of the near 100-point jump in the Dow and leading a strong rally in technology stocks.

Alphabet , Google's new holding company, and Amazon soared to record highs after their results beat expectations. Alphabet rose 10.5 percent to $752.50, while Amazon rose to $619.45.

 

Apple rose 2.6 percent to $118.47. Facebook rose 2 percent to breach the $100 mark for the first time, while Twitter was up 3.9 percent at $30.27.

"Of all the companies out there, it's the tech companies ... that are doing the best at growing their top line," said Tim Courtney, chief investment officer of Exencial Wealth Advisors, who added that revenue growth was still the biggest risk for U.S. companies.

At 12:27 p.m. ET (1627 GMT), the S&P 500 <.SPX> was up 17.18 points, or 0.84 percent, at 2,069.69, back in the black for the year, while the Dow Jones industrial average <.DJI> was up 101.65 points, or 0.58 percent, at 17,590.81, about 250 points shy of turning positive for the year.

The Nasdaq composite index <.IXIC> was up 98.02 points, or 1.99 percent, at 5,018.07, poised for its best day this month. The S&P information technology sector's <.SPLRCT> 2.9 percent rise led the six gainers among 10 major S&P sectors.

China's central bank cut interest rates for the sixth time since November on Friday in another attempt to jumpstart a slowing economy.

"Some of the worst fears associated with China were put to bed, at least temporarily," said Ernie Cecilia, chief investment officer of Bryn Mawr Trust.

Global markets extended gains after the news from China, a day after the European Central Bank signalled that it was ready to extend its stimulus plan.

Analyst sentiment on overall third-quarter earnings has improved following the string of strong results from blue chips.

S&P 500 earnings for the period are now expected to decline a more modest 2.8 percent than the 4.9 percent forecast at the start of the reporting season, according to Thomson Reuters data.

Whirlpool reversed early gains and fell 11.4 percent to $141.62 after lowering the top end of its full-year profit forecast.

Procter & Gamble rose 2.6 percent to $76.83 after profit beat estimates.

Pandora sank 33.6 percent to $12.74 after the music streaming service provider reported a bigger loss.

Skechers tanked 35 percent to $29.88 after its revenue missed estimates.

Advancing issues outnumbered decliners on the NYSE by 1,627 to 1,340. On the Nasdaq, 1,661 issues rose and 1,043 fell.

The S&P 500 index showed 51 new 52-week highs and 14 new lows, while the Nasdaq recorded 115 new highs and 48 new lows.

(Reporting by Abhiram Nandakumar in Bengaluru; Editing by Don Sebastian)