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Tech shares send Wall Street higher

Yet in after-hours trading, Alphabet shares fell more than 2 per cent. While its fourth-quarter revenue and profit beat Wall Street’s expectations, spending grew more than expected.

FAANG earnings have been a mixed bag. Shares of Apple and Facebook Inc rose after those companies’ quarterly results, while downbeat forecasts from Netflix Inc and Amazon.com Inc dragged down those companies’ shares.

Continued optimism regarding a possible trade truce between the United States and China also boosted tech shares, said Shawn Cruz, manager of trading strategy at TD Ameritrade in Jersey City, New Jersey.

“That’s the theme that’s going to be driving markets for the next couple of months, a focus on geopolitical headlines,” he said. “There’s not any negative news developing on the trade dispute with China front. That’s giving tech a little bit of a bid today.”

S&P 500 industrial stocks, another trade-sensitive group, posted the second- highest percentage gain among sectors, advancing 1.3 per cent.

The Dow Jones Industrial Average rose 175.48 points, or 0.7 per cent, to 25,239.37, the S&P 500 gained 18.34 points, or 0.68 per cent, to 2,724.87 and the Nasdaq Composite added 83.67 points, or 1.15 per cent, to 7,347.54.

After having dropped nearly 20 per cent below its record Sept. 20 close, the S&P 500 is now less than 8 per cent away from reaching that level. US stocks have been lifted so far this year by the Federal Reserve’s resolve to be “patient” with further interest rate hikes in addition to signs of progress in US-China trade talks.

Earnings season has also been relatively positive. About 71 per cent of the S&P 500 companies that have reported so far have exceeded analysts’ estimates, according to IBES data from Refinitiv.

Analyst estimates for fourth-quarter profit growth are now at 15.4 per cent. The profit growth forecast for the first quarter of 2019, however, is much lower at 0.5 per cent.

Allergan Plc shares dropped 3.8 per cent after the FDA approved Evolus Inc’s cheaper version of blockbuster Botox. Evolus shares jumped 11.8 per cent.

Shares of Ultimate Software Group Inc surged 19.7 per cent after the HR software provider announced that it had agreed to be acquired in a deal valued at about $US11 billion ($A15 billion).

Advancing issues outnumbered declining ones on the NYSE by a 2.06-to-1 ratio; on Nasdaq, a 2.19-to-1 ratio favoured advancers.

The S&P 500 posted 13 new 52-week highs and no new lows; the Nasdaq Composite recorded 63 new highs and 15 new lows.

Volume on US exchanges was 6.52 billion shares, compared to the 7.62 billion average over the last 20 trading days.

Reuters 

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