- Meta shares surge after Facebook ekes out user growth
- Qualcomm rises after it forecasts upbeat revenue
- GDP fell at a 1.4% annualized rate last quarter
- Indexes close: S&P 500 +2.47%, Nasdaq +3.06%, Dow +1.85%
(Reuters) - Wall Street ended sharply higher on Thursday after a strong quarterly report from Meta Platforms lifted beaten down technology and growth stocks and offset worries about the U.S. economy's contraction in the first quarter.
The Facebook parent (FB.O)surged 17.6% after the social network reported a larger-than-expected profit and rebounded from a drop in users.
Communication services (.SPLRCL) and technology (.SPLRCT) were among the strongest of 11 S&P 500 sector indexes, jumping 4.04% and 3.89%, respectively.
Apple Inc (AAPL.O), the world's most valuable company, and e-commerce giant Amazon.com Inc (AMZN.O) both rallied more than 4% ahead of their quarterly reports later in the day.
In extended trade, Amazon tumbled about 10% after the company forecast current-quarter sales below Wall Street estimates.
Investors have been dumping high growth stocks for weeks, due to worries about inflation, rising interest rates and a potential economic slowdown. Even with Thursday's strong gain, the tech-heavy Nasdaq was down almost 10% in the month of April, on track for its deepest one-month decline since March 2020.
The S&P 500 has gained or lost 2% or more in a day some 32 times so far in 2022, compared to 24 such days in all of 2021.
"When interest rates, the inflation path and what the Fed is going to do are so volatile, it just means that pricing every other asset is that much more difficult," said Zach Hill, head of Portfolio Strategy at Horizon Investments in Charlotte, North Carolina.
"We've done a lot of earnings data over the last couple days and weeks and by and large, outside of a few particular cases, corporate America's underlying fundamentals have been relatively strong," Hill said.
The U.S. economy unexpectedly contracted in the first quarter as COVID-19 cases surged again, and government pandemic relief money dropped.
The first decrease in gross domestic product since the short and sharp pandemic recession nearly two years ago, reported by the Commerce Department, was mostly driven by a wider trade deficit as imports surged, and a slowdown in the pace of inventory accumulation.
Unofficially, S&P 500 climbed 2.47% to end the session at 4,287.50 points.
The Nasdaq gained 3.06% to 12,871.53 points, while Dow Jones Industrial Average rose 1.85% to 33,916.39 points.
Overall, first-quarter earnings have been better than expected, with 81% of the 237 companies in the S&P 500 that have reported results so far beating Wall Street expectations. Typically, only 66% of companies beat estimates, according to Refinitiv data.
Qualcomm Inc (QCOM.O)surged 9.7% after the chipmaker forecast third-quarter revenue above analyst expectations.
The Philadelphia Semiconductor Index (.SOX) surged 5.6% in its biggest one-day gain in over a year.
Caterpillar Inc (CAT.N)fell 0.7% after it warned that profit margins in the current quarter were likely to be pressured from surging costs.
Among other movers, Amgen Inc (AMGN.O)fell 4.3% after the drugmaker said the U.S. Internal Revenue Service is seeking additional back taxes of $5.1 billion.
Volume on U.S. exchanges was 12.3 billion shares, compared with an 11.8 billion average over the last 20 trading days.
Across the U.S. stock market (.AD.US), advancing stocks outnumbered declining ones by a 2.6-to-one ratio.
The S&P 500 posted five new 52-week highs and 44 new lows; the Nasdaq Composite recorded 25 new highs and 672 new lows.