Tech shares lead sharp gains on Wall St. after results

By Caroline Valetkevitch

(Reuters) - A rally in Microsoft and other technology shares pushed U.S. stocks up sharply for a second day on Friday as earnings came in stronger-than-expected, while healthcare shares rebounded from recent losses.

An unexpected rate cut in China added to the positive tone.

Microsoft shares rose 11.6 percent to $53.66, their highest in 15 years, after the company's adjusted revenue beat expectations for the ninth quarter in a row.

Microsoft gave the biggest boost to the three indexes, accounting for a fifth of the Dow's gain and leading a strong rally in technology stocks. The S&P technology sector <.SPLRCT> jumped 3.4 percent, leading sector gains for the benchmark.

Alphabet , Google's new holding company, and Amazon soared to record highs after their results beat expectations. Alphabet was up 7.5 percent at $732.44, while Amazon rose 7.2 percent to $604.77.

"It's being driven by the good earnings" from a number of companies, said Giri Cherukuri, head trader at OakBrook Investments LLC in Lisle, Illinois. That may change the view on earnings "as people sit back and evaluate."

"Companies with big international exposure have a big drag due to forex, but looking past that, companies are doing well."

At 2:52 p.m., the Dow Jones industrial average rose 181.83 points, or 1.04 percent, to 17,670.99, the S&P 500 gained 26.37 points, or 1.28 percent, to 2,078.88 and the Nasdaq Composite added 126.52 points, or 2.57 percent, to 5,046.57.

China's central bank cut interest rates for the sixth time since November on Friday in another attempt to jumpstart a slowing economy.

Global markets extended gains after the news, a day after the European Central Bank signaled that it was ready to extend its stimulus.

Analyst sentiment on overall third-quarter earnings has improved following the string of strong results from blue chips.

S&P 500 earnings for the period are now expected to decline a more modest 2.8 percent compared with a 4.9 percent forecast at the start of the reporting season, according to Thomson Reuters data.

Procter & Gamble rose 2 percent to $76.37 after profit beat estimates.

Advancing issues outnumbered declining ones on the NYSE by 1,745 to 1,291, for a 1.35-to-1 ratio on the upside; on the Nasdaq, 1,862 issues rose and 938 fell for a 1.99-to-1 ratio favouring advancers.

The S&P 500 posted 54 new 52-week highs and 14 new lows; the Nasdaq recorded 127 new highs and 59 new lows.

(Additional reporting by Abhiram Nandakumar in Bengaluru; Editing by Don Sebastian and Nick Zieminski)