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S&P 500 surges, biggest daily percentage gain since March in earnings, data

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NEW YORK – The S&P 500 jumped on Thursday, its biggest daily percentage advance since early March, as companies like Morgan Stanley and United Health rallied after strong results, while data on the labor market and inflation eased fears about prospects for higher rates.

The tech sector jumped 2.3%, giving the S&P 500 its biggest boost, with Microsoft Corp and Apple Inc shares rising.

Shares of Citigroup, Bank of America Corp and Morgan Stanley also rose after they beat quarterly earnings estimates. The recovering economy allowed them to free up more cash that they had set aside for pandemic losses, while hot business, equity financing and trading increased profits. The S&P banking index rose 1.5%.

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Additionally, UnitedHealth Group Inc rose 4.2% after the health insurer reported results and increased its forecast for adjusted earnings for the full year thanks to the strength of its Optum unit that manages drug benefits.

To add to optimism, the data showed that the number of Americans who filed new claims for unemployment benefits last week fell near a 19-month low, and a separate report showed that producer prices fell in September.

Recent inflation reporting data suggested that COVID-driven price increases may have peaked. Still, Federal Reserve lawmakers remain divided on inflation and what to do about it.

“Some of the things that worried the market in September, and even last week, in terms of inflation and higher interest rates and the Delta variant, may have decreased,” said Alan Lancz, Chairman of Alan B. Lancz & Associates Inc., An investment advisory firm, based in Toledo, Ohio.

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“It’s not that it’s all over, but at least on a timescale, you can argue that it’s trending in the right direction.”

The Dow Jones Industrial Average rose 534.75 points, or 1.56%, to 34,912.56, the S&P 500 gained 74.46 points, or 1.71%, to 4,438.26 and the Nasdaq Composite added 251.79 points , or 1.73%, to 14,823.43.

While the S&P 500 posted its biggest daily percentage gain since March 5, the Nasdaq posted its biggest gain since May 20 and the Dow its biggest since July 20.

The gains were broad-based, with all but one sector of the S&P 500 increasing more than 1%.

Moderna Inc stock ended up 3.2% after a panel of expert advisers from the US Food and Drug Administration voted to recommend booster shots of its COVID-19 vaccine for Americans. 65 years and older and those at high risk of serious illness.

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Walgreens Boots Alliance Inc jumped 7.4% after the pharmacy chain reported fourth-quarter revenue and adjusted earnings above estimates and forecast growth of 11% to 13% over the long term.

US companies are expected to report strong earnings growth for the third quarter, but investors have been eager to hear what they say about rising costs, labor shortages and supply issues.

Forward issues outnumbered declining ones on the NYSE by 3.58 to 1; on Nasdaq, a 1.97-to-1 ratio favored those advancing.

The S&P 500 posted 32 new 52-week highs and no new lows; the Nasdaq Composite recorded 82 new highs and 46 new lows.

The volume of US exchanges was 9.26 billion shares, compared to the average of 10.800 million for the full session during the last 20 trading days. (Additional reporting from Devik Jain in Bengaluru and Federica Urso in Gdansk; edited by Arun Koyyur and David Gregorio)

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