January 31, 2019 / 4:50 PM / 6 months ago

US STOCKS-S&P, Nasdaq boosted by Facebook results; eyes on trade talks

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* Facebook surges after upbeat 4th-qtr

* Microsoft dips as Azure revenue growth slows

* DowDuPont top decliner on Dow as revenue misses

* Details awaited on U.S.-China trade talks

* Dow off 0.26 pct, S&P up 0.68 pct, Nasdaq up 1.23 pct (Changes comment, adds details, updates prices)

By Sruthi Shankar

Jan 31 (Reuters) - The S&P 500 and the Nasdaq extended a rally on Thursday, as strong earnings from Facebook Inc added to optimism after the Federal Reserve’s dovish remarks, with investors awaiting the outcome of the U.S.-China trade talks.

Facebook jumped 12.2 percent after its quarterly profit topped analysts’ estimates, showing that advertisers were still flocking to spend money on the service even after a series of high profile embarrassments.

General Electric Co soared 14.7 percent after the industrial conglomerate beat estimates for quarterly sales and cash flow and said it expects industrial revenue to rise by low to mid single-digit percent in 2019.

U.S. equities surged on Thursday after the Fed said it would be patient in raising interest rates further this year, easing investor concerns about tighter financial conditions crimping economic growth.

“The markets are still continuing to digest the Fed news from yesterday, but are more particularly looking at earnings because it is the heaviest week,” said Tom Martin, senior portfolio manager at GlobAlt Investments in Atlanta.

The United States and China opened a pivotal round of talks on Wednesday aimed at bridging deep differences over China’s intellectual property and technology transfer practices and easing a months-long tariff war.

U.S. President Donald Trump expressed optimism about high-level trade talks, but said no final deal would be made until he meets with Chinese President Xi Jinping in the near future.

“There are these mixed messages which are perfectly consistent with the administration’s strategy to get a more meaningful deal. So investors are at that place where they are hopeful for a long-term meaningful deal which will require some difficulties in the mean time,” said Martin.

With fourth-quarter earnings largely exceeding market expectations and the Fed striking a more flexible tone, the S&P 500 is on track to post its best monthly performance since October 2015.

Of the 210 S&P 500 companies that have reported fourth-quarter results, 71 percent have topped profit estimates, according to Refinitiv data.

At 11:32 a.m. ET the Dow Jones Industrial Average was down 65.39 points, or 0.26 percent, at 24,949.47, the S&P 500 was up 18.22 points, or 0.68 percent, at 2,699.27 and the Nasdaq Composite was up 88.35 points, or 1.23 percent, at 7,271.42.

The S&P communications services sector gained 3.74 percent, leading gains among the 11 major S&P sectors.

Charter Communications Inc jumped 15.7 percent after topping quarterly revenue estimates, as the cable operator attracted more customers for its internet services.

The Dow was dragged down by losses in DowDuPont Inc , which fell 8.0 percent after the chemical maker’s revenue fell short of expectations. The S&P materials sector dropped 1.5 percent.

Microsoft Corp declined 2.4 percent as its Azure cloud computing sales grew at a slower pace than a year earlier, although its quarterly results and forecast topped Wall Street estimates.

Intel Corp slipped 2.6 percent after the chipmaker named interim Chief Executive Officer Robert Swan to the role on a permanent basis.

Advancing issues outnumbered decliners for a 2.75-to-1 ratio on the NYSE and a 1.90-to-1 ratio on the Nasdaq.

The S&P index recorded 18 new 52-week highs and no new lows, while the Nasdaq recorded 33 new highs and 17 new lows. (Reporting by Sruthi Shankar and Shreyashi Sanyal in Bengaluru; Editing by Shounak Dasgupta)

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