Upbeat Earnings News Contributes To Rally On Wall Street - U.S. Commentary

(RTTNews) - Stocks moved sharply higher during trading on Thursday, partly offsetting the substantial weakness seen over the past few sessions. Bargain hunting contributed to the strength on Wall Street along with some upbeat earnings news.

The major averages ended the day firmly in positive territory but off their highs for the session. The Dow climbed 109.82 points or 0.7 percent to 15,848.61, the Nasdaq soared 71.69 points or 1.8 percent to 4,123.12 and the S&P 500 jumped 19.99 points or 1.1 percent to 1,794.19.

The strength on Wall Street came as some traders picked up stocks at reduced levels following the recent weakness, which dragged the Dow and the S&P 500 down to two-month closing lows on Wednesday.

Buying interest was also generated in reaction to the latest batch of earnings new, with shares of Facebook (FB) surging up by 14.1 percent.

After the close of trading on Wednesday, Facebook reported better than expected fourth quarter results, with the social media giant benefiting from strong mobile ad revenue growth.

Homebuilder PulteGroup (PHM), chipmaker Qualcomm (QCOM), and credit card giant Visa (V) also moved notably higher after reporting quarterly earnings that beat analyst estimates.

Traders also reacted positively to a report from the Commerce Department showing that U.S. economic growth slowed in the fourth quarter but matched economist estimates.

The Commerce Department said gross domestic product increased by 3.2 percent in the fourth quarter compared to the 4.1 percent growth seen in the third quarter.

Even though overall economic growth slowed, the report said the growth in consumer spending accelerated to 3.3 percent in the fourth quarter from 2.0 percent in the third quarter. The increase reflected the fastest growth since the fourth quarter of 2010.

Meanwhile, a separate report released by the Labor Department showed that initial jobless claims increased by more than expected in the week ended January 25th.

The National Association of Realtors also released a report showing a sharp drop in pending home sales in the month of December.

Sector News

While most of the major sectors moved to the upside, biotechnology stocks posted particularly strong gains. Reflecting the strength in the biotech sector, the NYSE Arca Biotechnology Index surged up by 2.9 percent.

Alexion Pharmaceuticals (ALXN) helped lead the biotech sector higher, jumping by 21.1 after reporting better than expected fourth quarter results and providing upbeat guidance.

Considerable strength was also visible among railroad stocks, as reflected by the 2.7 percent gain posted by the Dow Jones Railroads Index. With the gain, the index climbed further off the one-month closing low that it set on Monday.

Electronic storage stocks also turned in a strong performance on the day, resulting in a 1.8 percent gain by the NYSE Arca Disk Drive Index. Western Digital (WDC) and Hutchinson Technology (HTCH) posted notable gains.

Networking, healthcare, commercial real estate, and utility stocks also showed strong moves to the upside amid broad based buying interest.

Meanwhile, gold stocks bucked the uptrend by the broader markets, dragging the NYSE Arca Gold Bugs Index down by 2.5 percent. The weakness in the sector came as gold for April delivery tumbled $19.70 to $1,242.50 an ounce.

Other Markets

In overseas trading, stock markets across the Asia-Pacific region moved mostly lower during trading on Thursday. Japan's Nikkei 225 Index plunged by 2.5 percent, while Hong Kong's Hang Seng Index dropped by 0.5 percent.

Meanwhile, the major European markets ended the day mixed. While the U.K.'s FTSE 100 Index edged down by 0.1 percent, the German DAX Index and the French CAC 40 Index rose by 0.4 percent and 0.6 percent, respectively.

In the bond market, treasuries closed modestly lower but were well off their worst levels of the session. Subsequently, the yield on the benchmark ten-year note, which moves opposite of its price, edged up by 1.8 basis points to 2.693 percent.

Looking Ahead

Trading on Friday could be impacted by another batch of economic data, including reports on personal income and spending, consumer sentiment, and Chicago-area business activity.

Internet giants Amazon (AMZN) and Google (GOOG) may also be in focus following the release of their quarterly results after the close of today's trading.