US stocks up as tech resurgence, earnings lift mood at end of brutal month
U.S. stocks rose for a second day on Wednesday, as investors snapped up beaten-down technology favorites and strong results for General Motors and a host of other companies lifted spirits at the end of a torrid month for global equities.
Shares of Facebook Inc gained 3.7 percent after the social media giant said margins would stop shrinking after 2019 as costs from scandals ease.
The S&P communication services sector, which also houses Alphabet and Netflix, rose 2.33 percent.
Amazon.com Inc and Apple Inc, other members of the FAANG group, climbed 4.4 percent and 2.9 percent, respectively.
"It seems to be back to risk-on this morning, especially with the FAANGs leading the way," said Matt Watson, portfolio manager at James Investment Research in Alpha, Ohio.
The high-flying group has powered U.S. stock market's decade-long bull run, but fears of rising borrowing costs, global trade dispute and possible slowdown in U.S. corporate profits have pummeled the stocks recently.
"A lot of these high-growth names have really been in bear market territory because of the slump this month, but the valuation correction is allowing some of the bulls to be opportunistic and to jump in at the right moment," said Ryan Nauman, market strategist at Informa Financial Intelligence in Zephyr Cove, Nevada.
General Motors Co shares jumped 8.3 percent and were on track to post their biggest one-day gain since late May, after the No.1 U.S. automaker posted robust quarterly results and forecast strong full-year earnings.
At 12:39 p.m. ET, the Dow Jones Industrial Average was up 298.72 points, or 1.20 percent, at 25,173.36, the S&P 500 was up 37.10 points, or 1.38 percent, at 2,719.73. The Nasdaq Composite was up 157.05 points, or 2.19 percent, at 7,318.70.
Although the S&P 500 is on track to post its first two-day gains for the month on Wednesday, it is still set for its worst monthly performance in more than seven years. The Nasdaq was on pace for its biggest monthly loss since November 2008.
However, healthy results have pushed up third-quarter profit growth estimates for S&P 500 companies to 26.3 percent, according to Refinitiv data.
Defensive sectors were the only decliners, with the S&P consumer staples index dropping 0.87 percent, bogged down by losses in Kellogg Co.
Kellogg fell 7.2 percent after cutting its full-year profit forecast due to higher advertising and distribution costs.
Among other gainers, Yum Brands Inc rose 4.5 percent and Yum China Holdings Inc 14.7 percent as strong KFC sales drove results.
The financial sector rose 1.90 percent and the S&P 500 regional banks index gained 2.77 percent, on the U.S. Federal Reserve's proposal to ease regulations for banks with less than $700 billion in assets.
Advancing issues outnumbered decliners by a 2.03-to-1 ratio on the NYSE and by a 1.95-to-1 ratio on the Nasdaq.
The S&P index recorded eight new 52-week highs and four new lows, while the Nasdaq recorded 25 new highs and 77 new lows.
(With inputs from agencies.)