Microsoft, Amazon push S&P, Nasdaq higher

By Sruthi Shankar

(Reuters) - Gains in technology stocks powered by strong earnings from Microsoft, Amazon and Alphabet lifted the Nasdaq and the S&P on Friday, but losses in Chevron and Merck kept the Dow in the red.

Microsoft advanced 6.20 percent after the world's largest software company reported further gains from its cloud computing services.

Amazon jumped 8.26 percent and Google-parent Alphabet gained 4.26 percent after results.

The gains drove the S&P technology index up about 2 percent. The sector has gained about 30 percent this year, double the gains in the broader S&P index.

"Earnings is driving the positive sentiment at the open," said Scott Brown, chief economist at Raymond James in St. Petersburg, Florida. "Certainly a lot of enthusiasm for tech stocks that have reported."

As the third-quarter earnings season nears the halfway mark, 74 percent of the S&P companies topped expectations as of Thursday, above the 72 percent beat rate for the past four quarters.

Adding to the positive sentiment was a data showed the U.S. economy unexpectedly maintained a brisk pace of growth in the third-quarter, despite a hurricane-led drop in consumer spending and construction activities.

The Commerce Department said GDP increased at a 3.0 percent annual rate in the July-September period. Economists polled by Reuters had forecast a 2.5 percent growth.

At 9:33 a.m. ET (133 GMT), the Dow Jones Industrial Average was down 5.65 points, or 0.02 percent, at 23,395.21, the S&P 500 was up 8.85 points, or 0.35 percent, at 2,569.25 and the Nasdaq Composite was up 72.96 points, or 1.11 percent, at 6,629.73.

Energy stocks weighed on the S&P and the Dow. Chevron dipped 3.8 percent and Exxon fell 1.6 percent after reporting results.

Merck slipped 3.5 percent after the company reported a fall in revenue due to a cyber attack and loss of market share for many of its older drugs.

Mattel plunged about 17 percent after the toymaker said it would miss its full-year revenue forecast and stop dividend from the fourth quarter.

Expedia was slumped 20 percent after the online travel services company's profit missed Wall Street's consensus forecast.

Advancing issues outnumbered decliners on the NYSE by 1,217 to 1,180. On the Nasdaq, 1,247 issues rose and 952 fell.

(Reporting by Sruthi Shankar in Bengaluru; Editing by Arun Koyyur)