Strong Tech Earnings, GDP Data Set to Lift Wall Street

Oct. 27, 2017, at 7:38 a.m.

 
 
 

FILE PHOTO: The New York Stock Exchange (NYSE) is pictured in New York City, New York, U.S., August 2, 2017. REUTERS/Carlo Allegri/File Photo Reuters

By Sruthi Shankar

(Reuters) - Wall Street was set to open higher on Friday as strong earnings from technology giants and a better-than-expected quarterly GDP growth lifted investor sentiment.

Amazon jumped 8.18 percent after the world's largest retailer's sales surged and profit trounced expectations.

Google-parent Alphabet gained 3.9 percent as robust advertising sales boosted the tech major's revenue.

Microsoft advanced 4.86 percent after the world's largest software company reported further gains from its cloud computing services.

Apple was up 1.4 percent as pre-booking for its highly-anticipated iPhone X starts in the day.

As the third-quarter earnings season nears the halfway mark, 74 percent of the S&P companies topped expectations as of Thursday, above the 72 percent beat rate for the past four quarters.

"Earnings is driving the positive sentiment at the open," said Scott Brown, chief economist at Raymond James in St. Petersburg, Florida. "Certainly a lot of enthusiasm for tech stocks that have reported."

Tech stocks have rallied this year, with the S&P technology index <.SPLRCT> gaining about 30 percent this year, double the gains in the broader S&P index.

At 8:30 a.m. ET, Dow e-minis <1YMc1> were up 33 points, or 0.14 percent, with 27,868 contracts changing hands.

S&P 500 e-minis were up 5.5 points, or 0.21 percent, with 204,603 contracts traded.

Nasdaq 100 e-minis were up 45.75 points, or 0.75 percent, on volume of 47,369 contracts.

The U.S. economy unexpectedly maintained a brisk pace of growth in the quarter as an increase in inventory investment and a smaller trade deficit offset a hurricane-led drop in consumer spending and construction activities.

GDP increased at a 3.0 percent annual rate in the July-September period, the Commerce Department said on Friday. Economists polled by Reuters had forecast a 2.5 percent growth.

Oil prices steadied on Friday, with benchmark Brent crude trading just below $60 a barrel, buoyed by comments from Saudi Arabia's crown prince backing the extension of OPEC-led output cuts. [O/R]

Among other stocks, Intel was up 4.14 percent after the chipmaker raised full-year revenue and profit forecasts.

Mattel plunged 17 percent after the toymaker said it would miss its full-year revenue forecast and decided to halt dividend from the fourth quarter.

Expedia was down 17 percent after the online travel services company's profit missed Wall Street's consensus forecast.