Wall Street surges on upbeat earnings, hopes of end to government shutdown

U.S. stocks surged on Friday, as upbeat earnings reports helped investors put aside growth worries and hopes of a resolution to the lengthy U.S. government shutdown added to optimism.

With fourth-quarter earnings largely exceeding Wall Street expectations, the S&P 500 index was set to end a bumpy week, marked by concerns about slowing global growth and the government shutdown, on a high note.

The U.S. Senate is making a renewed effort to end the government shutdown that entered its 35th day as hundreds of thousands of federal workers missed a second paycheck, raising concerns about its economic impact.

President Donald Trump is expected to make an announcement at 1.30 pm E.T. on Friday, the White House said in a statement.

CBS News reported Trump was expected to endorse a stop-gap funding bill that would offer time to continue to debate his demand for border wall funds, while assuring federal workers get their pay.

"Earlier in the week, we hung a lot around the unchanged mark because there was really good earnings but bad news about either tariffs or the shutdown," said J J Kinahan, chief market strategist at TD Ameritrade in Chicago.

"Today there was more hopeful news and good earnings so the market has drifted higher."

Western Digital Corp, whose quarterly results fell short of estimates, rose 4 percent after the hard-disk drive maker said its revenue would improve in the second half of the year. Shares of rival Seagate Technology climbed 5.2 percent.

Intel Corp fell 5 percent after forecasting a dismal current quarter, blaming it on a slowdown in China and sluggish demand for its data centre and modem chips. Its shares capped gains on the Philadelphia Semiconductor index which climbed 2.2 percent, after a near 6 percent surge on Thursday.

Tech stocks led the gains, with Apple Inc jumping 2.7 percent. Microsoft Corp and Alphabet Inc rose more than 1 percent.

Investors are bracing for an event-packed week ahead, which includes the Federal Reserve`s policy meeting, U.S. jobs data, another round of trade talks and reports from Apple and Amazon.com Inc and other bellwether companies.

The Fed has forecast two more interest rate hikes in 2019, but Chairman Jerome Powell has stressed the central bank can be patient in approving any further hikes as officials gauge whether the U.S. economy will slow this year.

At 1:05 p.m. ET the Dow Jones Industrial Average was up 177.93 points, or 0.72 percent, at 24,731.17, the S&P 500 was up 23.65 points, or 0.90 percent, at 2,665.98 and the Nasdaq Composite was up 89.28 points, or 1.26 percent, at 7,162.75.

The consumer discretionary sector rose 1.02 percent, led by 2.8 percent gain in Starbucks Corp after its quarterly sales topped estimates.

Dragging on the healthcare sector was AbbVie Inc, which fell 6 percent after its quarterly profit missed estimates.

Medical equipment maker Resmed Inc plunged 17.8 percent, the most in the S&P, after reporting quarterly revenue below analysts` estimates.

Of the 112 companies in the S&P 500 companies that have reported quarterly results so far, 72.3 percent have surpassed profit expectations, according to Refinitiv data.

However, earnings growth estimates for the quarter have dropped to 14.3 percent from 20.1 percent at the start of October.

Advancing issues outnumbered decliners by a 3.96-to-1 ratio on the NYSE and by a 2.64-to-1 ratio on the Nasdaq.

The S&P index recorded 12 new 52-week highs and no new lows, while the Nasdaq recorded 27 new highs and 14 new lows.

(This article has not been edited by Zeebiz editorial team and is auto-generated from an agency feed.)