US STOCKS-Wall St rebounds on tech rally and signs of growth
* Spending, trade lift U.S. fourth-quarter growth
* Google shares up after deal with Lenovo Group
* Facebook shares rally after results beat expectations
* Dow up 0.8 pct; S&P 500 up 1.3 pct; Nasdaq up 2 pct
NEW YORK, Jan 30 (Reuters) - U.S. stocks bounced back on Thursday, with the S&P 500 and Nasdaq climbing more than 1 percent, helped by gains in the tech sector and data showing the U.S. economy grew as expected in the fourth quarter.
Facebook Inc shares jumped 15.4 percent to $61.76, supporting both the Nasdaq and S&P 500. The stock earlier hit an all-time intraday high of $62.50. The social media company delivered its strongest revenue growth in two years on Wednesday, beating analysts' estimates. The S&P tech sector index, up 1.7 percent, was among the day's best-performing sectors.
The day's rebound pushed the S&P 500 back into positive territory for the week, while the index was still down nearly 3 percent for the month. Each of the three major U.S. stock indexes dropped 1 percent on Wednesday after the Federal Reserve announced it would reduce its monthly bond purchases by another $10 billion.
Investors also are concerned that recent bold efforts by central banks in emerging economies to stabilize their currencies may not be enough to staunch an exodus of funds from those markets.
"It's a little bit of a technical bounceback from yesterday," said Stephen Carl, principal and head of U.S. equity trading at The Williams Capital Group in New York, adding that investors also saw "some good earnings in the tech sector."
Recent declines have kept the S&P 500 below its 50-day moving average.
Adding to support, data showed U.S. gross domestic product grew at an annual rate of 3.2 percent in the fourth quarter, the Commerce Department said on Thursday, in line with expectations.
The Dow Jones industrial average rose 125.26 points or 0.80 percent, to 15,864.05. The S&P 500 gained 22.51 points or 1.27 percent, to 1,796.71. The Nasdaq Composite added 80.98 points or 2.00 percent, to 4,132.41.
Among other gainers, Visa Inc shares climbed 1.7 percent to $220.74 after the world's largest credit and debit card company reported a 9 percent increase in quarterly profit as more people used its cards.
Google Inc shares jumped 3.8 percent to $1,149.28, a day after Lenovo Group said it would buy the Internet search giant's Motorola handset division for $2.91 billion.
Google is expected to report quarterly results after the bell, along with Amazon.com, up 5 percent at $403.50, and Chipotle Mexican Grill, up 2.5 percent at $496.65.
Some analysts were recommending large-cap stocks in 2014 over small caps due to the sector's high valuation and the impact of increased market volatility as the Fed continues to taper its stimulus efforts.
"Since the bear market bottom in March 2009, small cap stocks (as represented by the Russell 2000) have gained a total of 264 percent versus 201 percent for large caps (as represented by the S&P 500)," said Mary Ann Bartels, chief investment officer for portfolio solutions at Bank of America Merrill Lynch Wealth Management, in a note to clients.
"However, after years of outperformance, we see a potential change in equity leadership in 2014. In our opinion, attractive relative valuations, improving global economic growth and higher long-term interest rates are all likely to benefit large caps more than their smaller counterparts."
The day's economic data also showed the number of Americans filing new claims for unemployment benefits rose more than expected last week, but the underlying trend suggested the labor market continued to heal.