By Anora Mahmudova, MarketWatch
NEW YORK (MarketWatch) -- U.S. stocks rallied on Thursday as
investors welcomed data showing a robust pace of growth in the
economy in the final quarter of last year, while upbeat earnings
from Facebook Inc. and Visa Inc. boosted the tech sector.
On Wednesday, main indexes dropped 1% as turbulence in emerging
markets sent investors for cover while the Fed announced it would
trim its monthly bond-buying stimulus program by another $10
billion.
The S&P 500 (SPX) rose 23.9 points, or 1.4% to 1,798.17,
recouping all of its losses since Monday.
The Dow Jones Industrial Average (DJI) added 166 points, or
1.1%, to 15,904.03.
The Nasdaq Composite (RIXF) was the best-performing index,
gaining 82 points, or 2%, to 4,133.60. Read the stock market live
blog.
"What we are seeing today is a bounce from heavy selloffs in the
past few days. The GDP figures were robust, but I think a lot of
investors are overly excited about them. Next year, we project that
growth will be at 2.4% and not at 3%-4% that Fed predicts it will
grow, said Scott Wren, senior equity strategist at Wells Fargo
Advisors.
"In the near term, we will see a lot of volatility in the
markets and more downsides before this pullback is done. In the
long-term, we project the S&P 500 will return 7%-9% this year,"
he added
The U.S. economy expanded rapidly in the final quarter of 2013,
the Commerce Department said on Thursday, as consumers shrugged off
a government shutdown, with the data fueling hopes of even faster
growth ahead. The gross domestic product grew at 3.2% annual pace,
largely in line with expectations.
The number of people who sought U.S. unemployment benefits near
the end of January rose to the highest level in six weeks, but it's
unclear whether the increase is the residue of holiday-season
distortions or reflects a deterioration in the labor market. The
less-volatile, four-week average rose by a fraction.
Technology stocks rallied after upbeat earnings from Facebook
Inc. boosted sentiment earlier.
Facebook inc. shares (FB) surged 15.7% amid high volumes, after
its quarterly results, announced after the market close on
Wednesday, topped Wall Street's consensus.
Shares of Google Inc. (GOOG) rallied in after-hours trade on
Wednesday following the company's announcement that it will sell
its Motorola Mobility phone-hardware unit to Lenovo Group Ltd.
Shares rose 2.9% ahead of earnings, which are due to be released
after the closing bell.
Shares of Visa (V) rallied 2.6% after reporting higher quarterly
earnings and revenue than anticipated.
ConocoPhillips (COP) shares edged higher after the company
posted a profit of $2 a share for the fourth quarter.
Qualcomm Inc. (QCOM) shares rose 3% after the quarterly earnings
beat forecasts late Wednesday.
In overseas markets, European stocks rebounded in afternoon
action on Thursday, after data showed the U.S. economy grew at a
solid pace in the fourth quarter, offsetting worries about Chinese
manufacturing data pointing to a slowdown in the sector. That data
also hit Asian markets.
The dollar continued to strengthen along with the yen as
pressure remained on emerging-market currencies such as the Turkish
lira and Russian ruble. The Hungarian forint also saw pressure
against the euro. Gold slipped, while crude oil prices rose
following GDP data.
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