Solid tech earnings, Apple lift Nasdaq higher

(Reuters) – The Nasdaq Composite index surged more than 1 percent on Friday on blowout earnings from Microsoft, Amazon and Alphabet and after Apple said demand for its latest iPhone X is “off the charts”.

Microsoft (MSFT.O) advanced 7.14 percent after the world’s largest software company reported further gains from its cloud computing services.

Amazon (AMZN.O) jumped 10.23 percent and Google-parent Alphabet (GOOGL.O) gained 5.62 percent after results.

Apple (AAPL.O) rose 2.3 percent.

The gains drove the S&P technology index .SPLRCT up about 2.3 percent. The sector has gained about 30 percent this year, double the gains in the broader S&P index.

“In many ways, we’re seeing the strong getting stronger,” said Eric Wiegand, senior portfolio manager at the Private Client Reserve at U.S. Bank.

“While valuations are full, it certainly becomes imperative on them to deliver solid operating results and that’s something that we did see.”

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

A report about President Donald Trump favoring Federal Reserve Governor Jerome Powell as the head of the U.S. central bank also supported the stocks.

In Powell’s appointment, investors see a continuation of the current stock market-friendly monetary policy.

At 10:56 a.m. ET, the Dow Jones Industrial Average .DJI was up 5.52 points, or 0.02 percent, at 23,406.38, the S&P 500 .SPX was up 13.09 points, or 0.51 percent, at 2,573.49 and the Nasdaq Composite .IXIC was up 99.04 points, or 1.51 percent, at 6,655.82.

Energy stocks weighed on the S&P and the Dow.

Chevron (CVX.N) dipped 3.5 percent after the oil giant’s profit missed estimates as U.S. production slipped.

Merck (MRK.N) slipped 4.42 percent after the company reported a fall in revenue due to a cyber attack and loss of market share for many of its older drugs.

Mattel (MAT.O) plunged 14 percent after the toymaker said it would miss its full-year revenue forecast and stop dividend from the fourth quarter.

Expedia (EXPE.O) was slumped 17.8 percent after the online travel services company’s profit missed Wall Street’s consensus forecast.

Shares of drug distributors tumbled on a report that Amazon gained wholesale pharmacy license in multiple states.

CVS Health (CVS.N), Walgreens Boots Alliance (WBA.O), Rite Aid (RAD.N) fell between 7 percent and 3.9 percent.

Advancing issues outnumbered decliners on the NYSE by 1,417 to 1,326. On the Nasdaq, 1,386 issues fell and 1,331 advanced.

Reporting by Sruthi Shankar in Bengaluru; Editing by Arun Koyyur

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