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Wall St rebounds, market eyes tech results

Herbert Lash
·2-min read

US stocks have closed higher, with technology heavyweights rallying ahead of major earnings reports and upbeat domestic economic data calming investor jitters about surging coronavirus cases.

The rebound came after a more than 3 per cent slide on Wednesday in Wall Street's main indexes, underscoring heightened market volatility ahead of next week's presidential election and growing fears of another COVID slowdown.

Stocks rallied as investors anticipated strong results from a line-up of the biggest names in the US corporate universe - Apple Inc, Amazon.com Inc, Alphabet Inc and Facebook Inc - due after market close.

"The earnings season so far has resulted in significant positive earnings surprises," said Inverness Counsel investment strategist Tim Ghriskey in New York.

"We think that's helping to fuel today's rally in anticipation of positive surprises from these companies."

Tech companies have seen demand surge for products and services from people stuck at home during the pandemic.

A better-than-expected earnings report from Pinterest Inc , which forecast a rebound in ad spending, helped spur the rally. Shares of the image-sharing company soared more than 28 per cent.

The NYSE FANG+TM Index jumped 3.2 per cent. Communication services, materials and technology rose the most among major S&P sectors.

Sentiment also got a boost from data showing the US economy grew at a record pace in the third quarter after the government poured out more than $US3 ($A4.3) trillion in pandemic aid.

A separate report showed weekly unemployment claims fell last week.

"It's positive data but it's a little bit backward looking because you have COVID-19 cases on the rise again which doesn't really send a strong signal about the fourth quarter," said Citi Personal Wealth Management investment strategist Shawn Snyder.

The CBOE volatility index surged to a 15-week high this week due to lack of fiscal stimulus, while the White House coronavirus task force urged aggressive measures to curb the pandemic.

Democratic challenger Joe Biden holds a comfortable lead over President Donald Trump in national polls but the race in battleground states that will likely decide the election are tighter than the national surveys.

Unofficially, the Dow Jones Industrial Average rose 139.03 points, or 0.52 per cent, to 26,658.98, the S&P 500 gained 39.11 points, or 1.20 per cent, to 3,310.14 and the Nasdaq Composite added 180.73 points, or 1.64 per cent, to 11,185.59.

Coach owner Tapestry Inc climbed 4 per cent as it beat quarterly profit estimates and forecast growth for the year as demand for luxury handbags and apparel rebounded in China from pandemic lows.