Wall St. up on GDP and earnings; end-of-year fund picks up winners

Rodrigo Campos

NEW YORK (Reuters) – U.S. stocks rose on Thursday, helped by a strong quarterly economic growth reading and another round of upbeat earnings reports, including Visa, which rose nearly 140 points in the Dow Industrials.

Despite bullish data and Wednesday’s Federal Reserve statement indicating the economy was strengthening, gains in the S&P 500 were driven by the traditionally defensive health care and utilities sectors.

Analysts cited mutual funds’ purchases of top-performing stocks in these sectors as funds close their annual books at the end of this month. Healthcare (.SPXHC) and utilities (.SPLRCU) are up nearly 20 percent year-to-date.

“The end of the year for mutual funds will likely be a case of selling losers and continuing to buy winners,” said Art Hogan, chief market strategist at Wunderlich Securities in New York.

Healthcare also gained ground with Bristol-Myers Squibb (BMY.N) rising 8.9 percent to $58.98 after encouraging results from an experimental clinical trial of a lung cancer drug.

Gross domestic product grew at an annual rate of 3.5% in the third quarter, exceeding expectations. A separate report showed that first-time unemployment claims filed rose slightly last week, but a measure of underlying trends hit the lowest level since May 2000, a sign of the strength of the labor market.

In addition to support from earnings and economic data, market participants cited a Nikkei newspaper report that confirmed expectations that Japan’s government pension investment fund, seen as a guide for other Japanese institutional investors, will reduce exposure to Japanese bonds and increase holdings in local and overseas stocks. .

The iShares MSCI Japan ETF (EWJ.P) gained 0.8% and U.S. dollar-denominated Nikkei futures (NKc1) gained 0.7%.

“The more you hear demand for stocks around the world picking up, it will be a net positive for U.S. stocks,” said Quincy Krosby, market strategist at Prudential Financial in Newark, New Jersey.

“If you look globally, the growth is in the United States,” she said.

The Dow Jones industrial average (.DJI) rose 221.11 points, or 1.3 percent, to 17,195.42, the S&P 500 (.SPX) gained 12.35 points, or 0.62 percent, to 1,994.65 , and the Nasdaq Composite (.IXIC) added 16.91 points, or 0.37 percent. to 4566.14.

Visa (VN) rose 10.2 percent to $236.65, the biggest gainer for both the Dow and S&P 500 indexes, a day after reporting adjusted earnings that beat expectations and saying the mobile payments industry would be a “great enabler driving” business.

MasterCard (MAN.N) also recorded a better-than-expected profit, and revenues increased by almost 13%. Its shares rose 9.4 percent to $83.13.

This reporting season, 75.5 percent of S&P 500 companies beat earnings expectations, above the long-term average of 63 percent, according to Thomson Reuters data.

BRIEF NYSE Crash

The New York Stock Exchange said it experienced an outage in the posting and receipt of trades and quotes on two of its exchanges, the latest incident to hit critical trading data processors.

Within 10 minutes of the initial notification, the exchange issued a statement saying that the issue that affected the NYSE and NYSE MKT had been resolved. Traders noticed that the sudden, massive increase in stock futures volume occurred at the same time as the problems, but they couldn’t tell whether it was related.

Despite the interruption, trading in NYSE-listed securities appeared relatively unchanged, with volumes still seen to be steady.

Total volume on U.S. exchanges was 6.9 billion, below the daily average so far this month of 7.8 billion, according to BATS Global Markets.

New issues outnumbered NYSE issues by 1,948 to 1,116, an increase of 1.75 to 1; on the Nasdaq, 1,689 issues rose and 975 fell, a ratio of 1.73 to 1.

The benchmark S&P 500 Index recorded 81 new 52-week highs and 4 new lows; The Nasdaq Composite recorded 125 new highs and 50 new lows.

(Reporting by Rodrigo Campos, additional reporting by Chuck Mikołajczak and Caroline Valetkevitch; editing by Nick Zieminski)