NEW YORK -- Strong results from major companies, including Microsoft and Visa, helped U.S. stocks bust out of another losing streak Thursday. The rally wiped out part of Wednesday's market losses, but stocks are still down sharply over the past three weeks.
Shares of technology companies soared as Microsoft, Visa and Xilinx rallied after release of their quarterly earnings reports, while Twitter and Comcast led the way for Internet and media companies. Ford's results helped consumer-focused stocks.
Some encouraging economic news helped stabilize markets. The Commerce Department said orders to U.S. factories for major manufactured goods grew in September, and the increase was larger than analysts expected.
In Europe, European Central Bank President Mario Draghi said the region's economy is still growing at a solid clip even though there are signs it has weakened recently. Asian markets took big losses, as the U.S. market did Wednesday.
On Thursday, the S&P 500 index jumped 49.47 points, or 1.9 percent, to 2,705.57. The Dow Jones industrial average rose 401.13 points, or 1.6 percent, to 24,984.55 after rising as much as 520 points during the day. The Nasdaq surged 209.93 points, or 3 percent, to 7,318.34 after its biggest drop in seven years.
The S&P 500 had plunged 9.2 percent since Oct. 3 as investors worried about climbing interest rates and the effects of the U.S.-China trade dispute. The Nasdaq plummeted 11.4 percent through Wednesday.
Investors are worried that rising interest rates and disputes with trading partners could hurt the economy. They will get more insight today into how the U.S. is doing when the government reports on economic growth during the third quarter. Experts think the country's gross domestic product grew 3.3 percent from July to September, according to FactSet.
Microsoft surpassed analysts' forecasts in the first quarter as it mined new revenue sources in online subscriptions, gaming and its LinkedIn professional networking service. Shares of the tech giant jumped 5.8 percent to $108.30.
"It's certainly reassuring to see stocks bounce back [Thursday] on stronger earnings, but I would expect that we continue to see a lot of day-to-day volatility," said Kate Warne, an investment strategist for Edward Jones.
Twitter shares soared 15.5 percent to $31.80, and electric-car maker Tesla jumped 9.1 percent to $314.86 after their quarterly reports.
The S&P 500 suffered two separate six-day losing streaks this month and had fallen for 13 out of the past 15 days. That stretch also included a couple of big rallies, but the losses erased the benchmark index's gains from earlier in the year. After Thursday's gains, the Dow and S&P 500 are each up about 1 percent for the year.
"There's a transition going on and when there's a transition going on, there's a lot of volatility both up and down," said Randy Swan, founder of Swan Global Investments, which manages about $5 billion. "People are trying to figure out where things are going to go."
Sentiment has been tested in October, with global stocks poised for their worst month in more than six years as the effects of trade tensions and geopolitical uncertainty begin to bite. Investors remain apprehensive as a flood of earnings reports, while mostly stellar, have come with warnings about the future effects of tariffs and rising costs.
Central banks remain in the spotlight, with investors speculating about what, if any, effect the market uncertainty will have on policy decisions.
"The question is: can we go the distance?" said Donald Selkin, chief market strategist at Newbridge Securities. "You have to see how it goes."
Warne of Edward Jones said investors have been dumping shares of companies that reported weak results, while companies that surpassed expectations haven't been rewarded much. She expects that to change when the dust settles.
"When we get beyond earnings season and investors are wondering what now can drive the market higher or lower, knowing that we had a strong earnings season and companies did not lower their guidance very much will provide some support for stocks," she said.
Earnings for S&P 500 companies grew about 20 percent in the first and second quarters, and experts expect similar results for the third quarter.
On Thursday, the stock market looked the way it has looked for most of this year: high-tech and consumer-focused companies led the way while steadier, defensive stocks that pay big dividends weren't doing much, or lost ground.
While Microsoft, Alphabet and Amazon rallied Thursday after Microsoft's earnings, investors didn't like what they heard from Amazon and Alphabet, which reported earnings after the close of trading. The Internet retailer's shares dropped 4.8 percent in aftermarket trading while Google's parent company lost 3.2 percent.
Smaller, more U.S.-focused companies have also been sinking as Wall Street worries about future growth in the U.S. economy, which is tightly connected to their profits, as well as the possibility that rising interest rates will make it tougher for them to pay back their debts.
The Russell 2000 index gained 31.70 points, or 2.2 percent, to 1,500.40. It's fallen 13.8 percent since the end of August and is down 2.3 percent so far this year.
The French CAC 40 jumped 1.6 percent and Germany's DAX added 1 percent. The British FTSE 100 rose 0.6 percent, although WPP, the world's largest advertising company, said its business slowed in the third quarter and warned about weaker annual earnings. U.S.-traded shares of WPP fell 17.5 percent to $57.75.
Japan's Nikkei 225 index swooned 3.7 percent, and Hong Kong's Hang Seng index ended 1 percent lower. The Kospi in South Korea dropped 1.6 percent. The heaviest losses came from technology companies, including chipmakers Tokyo Electron and Taiwan Semiconductor Manufacturing and South Korea's Samsung Electronics. Japanese telecom and energy giant Softbank lost 4.4 percent.
U.S. bond prices were little changed. The yield on the 10-year Treasury note remained at 3.12 percent.
The price of benchmark U.S. crude rose 0.8 percent to $67.33 a barrel. Brent crude, the benchmark for international oil prices, rose 0.9 percent to $76.89 a barrel.
Gold rose 0.1 percent to $1,232.40 an ounce. Silver fell 0.3 percent to $14.63 an ounce. Copper dipped 0.1 percent to $2.75 a pound.
Information for this article was contributed by Marley Jay, Elaine Kurtenbach and Katie Tam of The Associated Press; and by Vildana Hajric and Sarah Ponczek of Bloomberg News.
A Section on 10/26/2018