Nasdaq, S&P 500 end at records after strong tech earnings

New York - The Nasdaq and S&P 500 powered to fresh records on Friday following blowout earnings from Amazon and other tech giants and a bullish update from Apple on its latest smartphone.

The tech-rich Nasdaq Composite Index jumped 2.2% to 6 701.26.

The broad-based S&P 500 rose 0.8% to 2 581.07, also a finishing record, while the Dow Jones Industrial Average gained 0.1% to 23 434.19.

Amazon alone surged 13.2%, adding nearly $62bn in market capitalisation in a single day after reporting only a modest rise in third-quarter profit but a 34% jump in revenues to $43.7bn.

"The headline tech names did not disappoint," said Quincy Krosby, chief market strategist at Prudential, who said the market was also boosted by hopes that Washington will enact President Donald Trump's tax cut and by a solid economy.

Government data on Friday estimated US growth at a better-than-expected 3.0% as the US economy absorbed the shocks of Hurricanes Harvey, Irma and Maria.

"At these valuations, you must see underlying strength in the economy," Krosby said. "You cannot maintain these valuations without economic growth."

Amazon was not the only big tech name to vault higher after strong earnings. Intel jumped 7.4%, Microsoft 6.4% and Google parent Alphabet 4.8%.

Apple, which reports quarterly results next week, gained 3.6% after reporting that consumer interest in its new iPhone is "off the charts." The new gadget hits retail stores on November 3.

An exception among tech companies was Expedia, which plummeted 16% as the online travel company lowered some of its financial targets due to the hit from hurricanes.

Other losers included Dow members Chevron, which lost 4.1% on an earnings miss, and Merck, which tumbled 6.1% after reporting a quarterly loss of $56m, due in part to costs from a cybersecurity attack.

Mattel dove 8.9% after it suspended its dividend and announced $650m in cost cuts after reporting a third-quarter loss of $603.3m.

Pharmacy chains fell sharply on worries Amazon would soon enter the drug distribution business. CVS Health lost 5.9%, Walgreens Boots Alliance 3.9% and Rite Aid 5.7%.

Aetna, which is reportedly in talks with CVS Health to be acquired, dropped 3.9%.

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