New York: US stocks surged on Thursday as expectations of reassuring results from bellwethers, including Google, lifted technology shares, while JPMorgan’s better-than-expected profit added to bank stabilization hopes.
Investors, encouraged by recent signs the economic slump may be abating, bet that technology earnings would show upside surprises, driving Google’s stock up 2.4% to $388.74 ahead of the Web search leader’s results after the close.
And indeed, Google delivered by reporting a stronger-than-expected first-quarter profit. Its stock popped up 5% to $408 in after-hours trading following the results and then slipped to $385.41.
During the regular session, Hewlett-Packard rose 5% to $36.60, while International Business Machines Corp or IBM gained 2.6% to $101.43. On Nasdaq, Apple Inc shares climbed 3.2% to $121.45. The semiconductor index rose 3.4%.
“People are starting to feel that maybe there’s a slight chance this is not just a bear market rally,” said John O’Brien, senior vice president at MKM Partners LLC in Cleveland, referring to the market’s 28 percent rebound since the 12-year closing low of 9 March.
“People are anticipating a pretty good number from Google,” O’Brien told Reuters ahead of Google’s earnings report. “They seem to like to under-promise and over-deliver.”
The Dow Jones industrial average rose 95.81 points, or 1.19%, to 8,125.43. The Standard & Poor’s 500 Index gained 13.24 points, or 1.55%, to 865.30. The Nasdaq Composite Index jumped 43.64 points, or 2.68% to 1,670.44.
Before the bell, JPMorgan’s results beat analysts’ expectations as debt trading and underwriting revenue surged. The news got Wall Street’s day off to a solid start, adding to a string of encouraging results from other banks, including Wells Fargo’s strong preliminary figures last week.
Regions Financial said it will post a first- quarter profit, pushing the regional banking company’s shares up 34% to $6.70.
Shares of JPMorgan climbed 2.1% to $33.24, while Citigroup, due to post quarterly results on Friday, rose 1.01% to $4.01. The KBW Bank index rose 2.1%.
In a sign that investor fear may be receding, the CBOE Volatility Index, or VIX, dropped for a third straight day, hitting its lowest close since late September.
Additionally, Rosetta Stone Inc’s strong debut suggested equity investors were becoming more willing to take on risk. Rosetta Stone’s initial public offering was only the third to price this month, making April the best month since last July.
Rosetta Stone jumped to $25.12 on the New York Stock Exchange -- up 40% from its IPO price of $18. Also boosting sentiment were stronger-than-expected quarterly results from Harley-Davidson Inc, which boosted consumer spending hopes.
The motorcycle maker’s shares rose 5.7% to $18.11.
Optimism about the technology sector also received a boost from cellphone maker Nokia after its announcement that a drop in demand for its products was stabilizing, driving its shares up 11.4% to $14.88 on the NYSE.
But in one sign of the recession’s impact on consumers, General Growth Properties Inc, the second-largest U.S. mall owner, on Thursday filed for Chapter 11 bankruptcy protection, making it one of the biggest victims of the credit crisis yet.
The day’s economic data provided a mixed picture. The Philadelphia Federal Reserve’s survey of regional manufacturing showed a less drastic contraction, while the Commerce Department data showed March housing starts fell 10.8% to a seasonally adjusted annual rate of 510,000 units, the second lowest on record dating back to 1959.
Trading was active on the New York Stock Exchange, where about 1.61 billion shares changed hands, above last year’s average daily volume of 1.49 billion. On the Nasdaq, about 2.37 billion shares traded, above last year’s average daily volume of 2.28 billion.
Advancers outnumbered decliners on the NYSE by a ratio of about 4 to 1, while on the Nasdaq, more than two stocks rose for every one that fell.