NEW YORK (Reuters) – US equities rallied on Thursday as Microsoft's strong earnings helped Nasdaq-listed companies recover from the sharpest decline in their technology focus since 2011 in the previous session.
Traders said investors were bargain-hunting after Wednesday's market fever, erasing the S & P 500 Dow and earnings for the year and confirming a correction for the Nasdaq. On Thursday, Dow and S & P 500 were back in positive territory for the year.
Microsoft (MSFT.O) jumped 6.3 percent after outperforming consensus estimates for revenue and earnings. That, along with profits in chipmakers, helped technology stocks increase. SPLRCT 2.89 percent.
"It's a bit oversold, and profits have helped," said Robert Pavlik, chief investment strategist and senior portfolio manager at SlateStone Wealth LLC, New York.
"But it could also be short so you can not blindly look at it and say the profits are turning the market around and we're all clear." Many people are currently skeptical about any kind of action in the market, especially upwards Volume today light. "
The market has been trading lower in recent days than down, prompting Pavlik that the recent sell-off may not be over.
The last round of positive results came from a wide range of companies, including Visa (v.n), Whirlpool (WHR.N), Twitter (TWTR.N) and American Airlines (AAL.O) and provided relief after the reporting season began with a lukewarm note and then fell back on sluggish prospects from manufacturers and chipmakers.
This increased concerns about the impact of tariffs and the slowdown in corporate profits in China, as well as worries about rising costs, bond yields, Italy's budget struggles and upcoming congressional elections in the US.
In further signs of a slowdown in economic growth, US equipment spending appeared to have remained subdued in September, and the trade deficit widened further as rising imports surpassed the recovery in exports.
At 3:11 ET, the Dow Jones Industrial Average (DJI) rose 469.8 points, or 1.91 percent, to 25,053.22, while the S & P 500.SPX rose 63.59 points or 2.39 percent to 2,719.69 and the Nasdaq Composite .IXIC added 249.98 points, 3.52 percent to 7,358.38.
But the sell-off also made stocks cheaper. The S & P rating fell to 15.5x earnings estimates for the next 12 months from 15.8 to a two-and-a-half-year low, according to Refinitive data.
Results from the S & P 500 companies pushed earnings expectations for the third quarter up from 21.8 percent in the last ten days to 23.6 percent. But bleak predictions have pushed down growth estimates for the fourth quarter from 19.9 percent to 19.4 percent, as refining data shows.
Ford MotorF.N), which is battling sales in China, edged up 9.9 percent as its earnings report raised hopes for a strong end to the year and strengthened gains in the consumer discretionary sector (SPLRCD).
Modern Micro Devices & # 39; (AMD.O) weak forecast sent its share by 15.2 percent. But the Philadelphia Semiconductor Index .SOX rose 1.97 percent, helped by Xilinx's 15.2 percent jump on its strong quarterly report.
Progressive problems were on the NYSE with a ratio of 2.73 to 1 in the majority; on the Nasdaq, a ratio of 2.91 to 1 favored the trailblazers.
The S & P 500 recorded a new 52-week high and 36 new lows; The Nasdaq Composite recorded 13 new highs and 202 new lows.
Additional reporting by Amy Caren Daniel in Bengaluru; Editing by Arun Koyyur and Dan Grebler