Wall Street powered higher by tech, Amazon results

By Chuck Mikolajczak

NEW YORK (Reuters) - Wall Street climbed on Friday as a surge in the tech sector and a rally in Amazon shares helped push the Nasdaq to its best day in nearly a year.

The S&P technology index led the way higher, up 2.91 percent. The index notched its best day since March 1, 2016 and is up nearly 35 percent on the year versus the 15-percent gain in the S&P 500.

Google-parent Alphabet gained 4.26 percent as its revenue got a boost from advertising sales. Microsoft jumped 6.41 percent after the world's largest software company reported further gains from its cloud computing services.

 

Also lifting the sector were shares of Apple , which rose 3.58 percent after the company allayed concerns of muted demand for its 10th anniversary phone. Intel soared 7.38 percent after its quarterly results topped estimates and the chipmaker raised its full-year forecasts.

Amazon , up 13.22 percent, was responsible for the biggest boost to the S&P 500 after reporting a quarterly sales surge. Its gains helped lift the consumer discretionary sector 1.60 percent to its best daily performance since Dec. 7.

"Anyone who is drawing parallels to the tech bubble of 1999 has to at least consider that this rally in those large names is really fuelled in large part by earnings, not just hope," said Jack Ablin, chief investment officer at BMO Private Bank in Chicago.

"They are the ones that everyone wants to own, has to own because they are the ones reporting the best earnings. They definitely came through, that is very positive."

"There are certainly similarities between the tech bubble and now, but the underpinnings of this rally are still a lot more solid."

Adding to the positive sentiment was the third-quarter GDP data that showed the U.S. economy unexpectedly maintained a brisk pace of growth, at a 3-percent annual rate, despite a hurricane-led drop in consumer spending and construction activities.

A report about President Donald Trump favouring Federal Reserve Governor Jerome Powell as the head of the U.S. central bank also provided a boost for stocks. In Powell's potential appointment, investors see a continuation of the current monetary policy.

The Dow Jones Industrial Average <.DJI> rose 33.33 points, or 0.14 percent, to 23,434.19, the S&P 500 <.SPX> gained 20.67 points, or 0.81 percent, to 2,581.07 and the Nasdaq Composite <.IXIC> added 144.49 points, or 2.2 percent, to 6,701.26.

Forgot to update the weekly #'s. For the week, the Dow rose 0.5 percent, the S&P 500 gained 0.2 percent and the Nasdaq advanced 1.1 percent. The S&P has notched gains for seven straight weeks, its longest weekly winning streak in three years.

Earnings growth for the third quarter is now 6.7 percent, according to Thomson Reuters data. Of the 273 companies that have posted earnings, 74 percent have topped expectations, compared with the 72 percent beat rate over the past four quarters.

Not all earnings were positive, however. Chevron's 4.14 percent fall weighed on the S&P and the Dow after the oil company's profit missed estimates.

Merck dropped 6.05 percent after the company reported a revenue drop due to a cyber attack and loss of market share for many of its older drugs.

Advancing issues outnumbered declining ones on the NYSE by a 1.62-to-1 ratio; on Nasdaq, a 1.70-to-1 ratio favoured advancers.

About 7.43 billion shares changed hands in U.S. exchanges, above the 6.04 billion daily average over the last 20 sessions.

(Reporting by Chuck Mikolajczak; Editing by Nick Zieminski)