Nasdaq jumps 2.27%, closes above 5000 on tech earnings

Strong quarterly earnings from several big-name technology companies helped rally the market.

FALLING SHORT: Skechers United States of America slumped 34.7 percent after the shoe company reported better-than-expected third-quarter profit, but a jump in revenue still disappointed Wall Street.

Safe-haven assets such as gold and bonds fell as stocks surged Friday.

The gains brought the Standard & Poor’s 500 index almost back to breakeven for the year following steep declines in August and September. It was the sixth interest-rate cut in a year.

The People’s Bank of China slashed its one-year lending rate by a quarter of a percentage point and removed a ceiling banks were forced to pay depositors on Friday, in its latest attempt to bolster its flagging economy.

Amazon.com, Google and Microsoft all topped profit estimates last quarter, adding more than US$90 billion (S$126 billion) in market cap in after-hours trading following their earnings reports last Thursday. Google parent Alphabet increased 5.6 per cent as it sold more ads and kept costs under control, fuelling better-than-projected sales and profit. Numerous tech companies are yet to report but the results of these bellwethers were very impressive and likely sustainable in the coming periods as well.

But the company can also thank all those Office and One Drive users out there for its cloud gains.

Their earnings stoked the overall tech sector.

The Nasdaq composite, which is heavily weighted with technology stocks, rose 111 points, or 2.3 percent, to 5,031. Its $21.7 billion revenue beat the $21 billion expected by analysts. The Nasdaq added 79.93 points, or 1.7 percent, to 4,920.05.

The cloud computing to online retail firm credited its Prime Day sale in July – launched to mark Amazon’s 20th anniversary – for a 23% jump in sales. So far, Google’s ability to capture more traffic (clicks were up 23%) has more than offset the lower rates per click (down 11%), but it’s unclear how long that will continue, particularly given rival Facebook’s leadership in mobile. Meanwhile, phone revenue tanked by 54%.

Major USA stock indexes moved sharply higher in afternoon trading on Friday, on course to deliver their second gain in two days. But there is still a few reason to cheer.

Well. Bully for those who made bets on the two tech names in the face of the market’s ennui. Investors are hopeful – the stock is at its highest point since before the dot-com bubble burst.

On the negative side, Pandora Media plummeted the most since going public in June 2011 after issuing a sales forecast that fell short of analysts’ estimates and recording charges of $81.8 million to settle legal disputes with the music industry.

All things considered, today’s a good day to be the billionaire founder of a West Coast tech giant.

These factors have instilled confidence in investors.

Last quarter, it posted a 316.67% negative surprise.

Facebook also rose, with shares in the Menlo Park company breaking the $100 level for the first time.

T-Mobile is a national wireless service provider and has a market capitalization of $33.6 billion.

It was an especially active post-market session for the index because those companies are three of its four biggest holdings.