Wall Street rises as technology stocks gain in value

(Reuters) – US equities rallied on Thursday as strong corporate earnings, including from software company Microsoft and automaker Ford, eased the nerves following a fierce sell-off in the previous session that sent Nasdaq into the correction area.

Traders work on the floor of the New York Stock Exchange (NYSE) in New York, USA, October 24, 2018. REUTERS / Brendan McDermid

Microsoft (MSFT.O) rose 6.1 percent after exceeding consensus estimates for revenue and profit, supported by strong demand for its Azure cloud computing and Office 365 software products.

The results, along with gains for chipmakers, boosted technology shares .SPLRCT by 2.32 percent. The sector lost around 10 percent in October and would be the worst month for the fast-growing sector in almost 10 years in the event of losses.

Ford MotorF.N), which has to contend with the sales in China, rose by 7.4 percent, as its earnings report raised hopes for a strong end to the year, while Raytheon (RTN.N) by -1.2 percent after the US arms company raised its annual forecast.

The results provided Wall Street with hope that week was hampered by a series of lingering outlooks from manufacturers and chipmakers worried about the impact of tariffs, a slowdown in profits and global growth in China.

This, along with concerns ranging from rising borrowing costs and bond yields to Italy's budget and upcoming US midterm elections, sparked a defeat on Wall Street on Wednesday.

"There is a sense of nervousness and caution because many people were surprised by the fall yesterday," said Scott Brown, chief economist at Raymond James in St. Petersburg, Florida.

"It's all about feelings at this point, people are looking for things to calm down, and I think we need to see more concrete evidence."

At 9:59 pm EDT, the Dow Jones Industrial Average .DJI rose 213.46 points or 0.87 percent to 24,796.88, while the S & P 500.SPX rose 30.19 points or 1.14 percent to 2,686. 29 and the Nasdaq Composite .IXIC rose 140.58 points or 1.98 percent at 7,248.99.

The newly revamped communications services sector .SPLRCL rose 2.38 percent, with the highest of the seven major S & P sectors higher.

Twitter (TWTR.N) rose 18.6 percent, after strong ad revenue third-quarter earningsCMCSA.O) 18.6 percent after the media company's quarterly results exceeded Wall Street's estimates.

The Philadelphia SE Semiconductor Index .SOX rose 1.39 percent, supported by Xilinx 15.3 percent, while Intel (INTC.O), The main competitor of AMD, put on after the final chime before the quarterly report by 2.4 percent.

In contrast, Advanced Micro Devices (AMD.O) by 12.5 percent after the chipmaker had forecast sales in the fourth quarter below estimates.

Results from the S & P 500 companies have upgraded their earnings estimates for the third quarter from previously 21.6 percent to 22.4 percent, but the gloomy outlook has growth estimates for the fourth quarter of 20, according to the refining data 19.5 percent pulled down.

Tesla (TSLA.O) climbed 9.1 percent after the electric car maker broke the promise of quarterly earnings of billionaire chief executive Elon Musk.

Progressive issues outweighed declines by a 2.71 to 1 ratio on the NYSE and a 2.99 to 1 ratio on the Nasdaq.

The S & P index did not record new 52-week highs and 24 new lows, while the Nasdaq recorded five new highs and 107 new lows.

Reporting by Amy Caren Daniel in Bengaluru

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