* 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 0.7 pct; S&P 500 up 1.1 pct; Nasdaq up 1.8 pct
By Caroline Valetkevitch
NEW YORK, Jan 30 The S&P 500 scored its biggest
gain in more than a month on Thursday as Facebook led a tech
rally and data showed the U.S. economy was on solid footing in
the fourth quarter.
The day's rebound pushed the S&P 500 back into positive
territory for the week, but the index was still down 2.9 percent
for the month.
Facebook Inc shares jumped 14.1 percent to end at
$61.08, hitting a lifetime high of $62.50 during the session and
supporting both the S&P 500 and Nasdaq. The social media company
delivered its strongest revenue growth in two years on
Wednesday, beating analysts' estimates.
Google Inc shares jumped 2.6 percent to $1,135.39,
a day after Lenovo Group said it would buy the
Internet search giant's Motorola handset division for $2.91
After the closing bell, Google's shares extended gains by
2.2 percent when the company reported results.
The S&P 500 tech sector index finished the regular
session up 1.5 percent and was among the day's best-performing
sectors, though all 10 sector indexes ended the day higher.
On Wednesday, each of the three major U.S. stock indexes
dropped 1 percent after the Federal Reserve announced it would
reduce its monthly bond purchases by another $10 billion.
Worries about emerging markets also hit stocks in recent
"I think the rhetoric about emerging market currencies had
settled down some ... I'm not surprised to see the market really
bounce back, especially in sectors that had been pretty hard
hit" said Tim Ghriskey, chief investment officer of Solaris
Group in Bedford Hills, New York.
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.
Strong household spending and robust exports
supported the growth.
The Dow Jones industrial average rose 109.82 points
or 0.7 percent, to end at 15,848.61. The S&P 500 gained
19.99 points or 1.13 percent, to finish at 1,794.19, its biggest
daily percentage gain since Dec. 18.
The Nasdaq Composite added 71.69 points or 1.77
percent, to close at 4,123.13, its best daily percentage rise
since Oct. 10.
Investors also have been concerned that bold efforts by
central banks in the emerging economies to stabilize their
currencies may not be enough to staunch an exodus of funds from
Shares of Qualcomm rose 3 percent to $73.26, a day
after the leading mobile chipmaker reported results. Qualcomm
bumped up its full-year earnings outlook.
Among other gainers, Visa Inc shares climbed 1.7
percent to $220.88 after the world's largest credit and debit
card company reported a 9 percent increase in quarterly profit
as more people used its cards.
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.
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.
"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," said
Mary Ann Bartels, chief investment officer for portfolio
solutions at Bank of America Merrill Lynch Wealth Management, in
a note to clients.