US STOCKS-Nasdaq hits record high with Apple, Amazon results on deck

·3 min read

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* Caterpillar, Merck rise after posting higher profits

* U.S. economic growth slowed sharply in Q3

* EBay slips on weak fourth-quarter forecast

* Dow up 0.53%, S&P 500 up 0.88%, Nasdaq up 1.27% (Updates to midafternoon, changes byline)

By Chuck Mikolajczak

NEW YORK, Oct 28 (Reuters) - The Nasdaq hit a record high on Thursday, boosted by gains in Apple and Amazon ahead of their quarterly earnings, while solid results from companies such as Caterpillar and Merck helped ease concerns about slowing economic growth denting corporate profits.

Mega-cap stocks Tesla Inc, Apple Inc and Amazon.com Inc led the Nasdaq and helped propel the index to a record after the S&P 500 and Dow reached fresh peaks earlier in the week. Tesla shares gained 3.1%, Apple rose 2.5%, and e-commerce giant Amazon.com advanced 2.3%. Both Apple and Amazon were scheduled to post quarterly results after the closing bell.

Caterpillar Inc added 3.6% after reporting a better-than-expected quarterly profit on rising commodity prices, while a forecast raise by drugmaker Merck & Co Inc helped boost its shares by 5.5%.

The solid earnings helped offset a report from the Commerce Department which showed the U.S. economy grew at a 2% annualized rate in the third quarter as COVID-19 infections flared up, short of the 2.7% estimate, while another set of data showed fewer Americans filed new claims for unemployment benefits last week as the labor market slowly improves.

"Clearly we are seeing a large batch of macroeconomic data that has been coming through during the middle of third-quarter earnings reporting season and you are seeing a little bit of a tug-of-war that exists between macroeconomic data that is appearing to be somewhat softer at the margin and corporate performance which is proving to be better than expectations," said Bill Northey, senior investment director at U.S. Bank Wealth Management in Minneapolis.

The Dow Jones Industrial Average rose 187.52 points, or 0.53%, to 35,678.21, the S&P 500 gained 39.95 points, or 0.88%, to 4,591.63 and the Nasdaq Composite added 193.36 points, or 1.27%, to 15,429.20.

Each of the 11 major S&P sectors rose, with consumer discretionary and industrials each rising more than 1%.

Strong earnings reports have helped fuel an advance in the benchmark S&P index in 10 of the past 12 session, with analysts now expecting profits for S&P 500 companies to grow 38.6% year-on-year in the third quarter. Of the 244 S&P 500 companies that have reported earnings through Thursday morning, 82% have topped earnings estimates.

President Joe Biden said he had secured a new $1.75 trillion framework for economic and climate change spending that could pass the Senate, and expressed confidence it would win the backing of all wings of the Democratic Party.

Among the biggest decliners, EBay Inc fell 7.0% after the e-commerce firm forecast downbeat holiday-quarter revenue.

Advancing issues outnumbered declining ones on the NYSE by a 2.07-to-1 ratio; on Nasdaq, a 2.31-to-1 ratio favored advancers.

The S&P 500 posted 33 new 52-week highs and 4 new lows; the Nasdaq Composite recorded 90 new highs and 85 new lows.

(Reporting by Chuck Mikolajczak in New York Editing by Matthew Lewis)

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