US: Wall St rises on big-tech strength, shrugs off bleak data

[NEW YORK] Wall Street's main indexes rose on Thursday, as a reversal of declines in mega-cap technology stocks helped investors look past data which showed another sharp contraction in the US economy.

At 9.52 am ET the Dow Jones Industrial Average was up 334.78 points, or 1.10 per cent, at 30,637.95, the S&P 500 was up 39.24 points, or 1.05 per cent, at 3,790.01, and the Nasdaq Composite was up 93.42 points, or 0.70 per cent, at 13,364.01.

Heavyweights including Microsoft, Facebook, Netflix and Alphabet rose in early trading, supporting the tech-heavy Nasdaq index.

With the quarterly reporting season in full swing, market participants started to question whether companies including Apple, Facebook and Tesla could justify their premium valuations.

"Investors are digesting earnings that came out overnight and this morning, and taking a look at the fundamentals of what's going on in specific companies, as well as any outlook that can be provided to try to justify valuations," said Brian Vendig, managing executive at MJP Wealth Advisors in Westport, Connecticut.

Data showed the U.S. economy contracted at its sharpest pace since World War Two in 2020 as Covid-19 ravaged services businesses such as restaurants and airlines.

A separate report showed 847,000 more people likely filed jobless claims last week, strengthening views of a persistent labor market weakness.

"This is a market which thinks about what the economy might look like six months from now ... and I think this is a time when the near-term numbers are of very little consequence to most investors," said Rick Meckler, partner at Cherry Lane Investments, a family investment office in New Vernon, New Jersey.

REUTERS