Wall St. higher on tech boost, focus shifts to earnings

(Reuters) – U.S. stocks bounced back on Thursday, helped by technology shares as focus shifted to corporate earnings after a cautious message from the Federal Reserve on interest rates drove some of the biggest falls since May in the previous session.

The U.S. central bank reduced borrowing costs by a widely-expected quarter of a percentage point on Wednesday, but Fed Chairman Jerome Powell signaled a series of further cuts was unlikely, leading to a sharp selloff on the S&P 500 and Dow.

Despite that, all three major indexes posted their second straight monthly gains in July, closing the book on a month in which the S&P 500 and the Nasdaq reached fresh record highs.

“It was always going to be a tough job for the Fed to be as dovish as stock markets hoped. The 25 bps cut was a non-event,” said Chris Beauchamp, chief market analyst at IG, in a note.

“With the Fed out of the way there is a chance that we can all get back to focusing on earnings and how earnings season continues to paint a broadly positive picture.”

Almost three weeks through earnings, reports so far have been strong. Of the 296 companies in the S&P 500 that have reported second-quarter earnings, 74.7% have beaten Street estimates for profit, according to Refinitiv data.

The S&P 500 technology sector, Wall Street’s best performer so far this year, rose 1.12% after a 1.5% drop in the previous session.

Verizon Communications Inc rose 1.41%, driving a 0.85% gain in the communication services sector, after the wireless carrier beat quarterly profit estimates as it added far more net new phone subscribers who pay a monthly bill than expected.

The Dow Jones Industrial Average rose 96.27 points, or 0.36%, to 26,960.54, the S&P 500 gained 14.11 points, or 0.47%, to 2,994.49.

The Nasdaq Composite added 71.57 points, or 0.88%, to 8,246.99.

Kellogg Co jumped 9.52% after the company beat analysts’ expectations for quarterly sales and profit, driven by higher demand for its snacks, including Pringles and Pop-Tarts, in North America.

But not all reports were upbeat.

Qualcomm Inc dropped 3.32% after the chipmaker’s quarterly revenue and profit forecast fell short of Wall Street targets.

Among other decliners, the energy sector slid 0.59%, the most among the 11 major S&P sectors, as oil prices declined on Fed commentary on further rate cuts and as rising U.S. output helped keep the market well supplied. [O/R]

Shares of oil major Exxon Mobil Corp dropped 0.65%, while Chevron Corp dipped 0.04%. Both companies are due to report earnings on Friday.

Advancing issues outnumbered decliners by a 1.23-to-1 ratio on the NYSE and by a 1.94-to-1 ratio on the Nasdaq.

The S&P index recorded 13 new 52-week highs and five new lows, while the Nasdaq recorded 42 new highs and 44 new lows.

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