S&P 500, Nasdaq hit record highs on tech earnings boost, upbeat data

The S&P 500 and Nasdaq indexes hit record levels on Thursday after stellar earnings from Apple and Facebook powered a rally in tech stocks, while upbeat economic data supported bets of a swifter economic recovery.

Apple Inc gained 1.0% after posting sales and profits ahead of Wall Street estimates, led by much stronger-than-expected iPhone and Mac sales.

Facebook Inc jumped 6.6% to hit an all-time high on beating analysts' expectations for both quarterly revenue and profit, helped by a surge in digital ad spending during the pandemic, along with higher ad prices.

The S&P 500 communication services sector, which houses Facebook, jumped 2.4%, leading gains among the 11 major S&P sectors.

"We expected tech earnings to come in strong and they comfortably cleared the high bar which is extremely impressive. But also, it is another sign just how quickly this economy continues to roar back," said Ryan Detrick, chief market strategist at LPL Financial.

Data showed the US economic growth accelerated in the first quarter, fueled by massive government aid to households and businesses, while a Labor Market report showed 553,000 people filed for state unemployment benefits last week, compared with 566,000 in the prior period.

"The outlook keeps getting better ... and with household balance sheets in great shape and the US economy opening up more and more we should be expecting very strong growth for several quarters to come," James Knightley, chief international economist at ING, wrote in a client note.

More earnings reports from Dow components rolled in, with Caterpillar Inc falling 1.7% even as it reported a rise in adjusted first-quarter profit. Drugmaker Merck & Co Inc slid 3.3% on posting a drop in quarterly profit.

Global shares extended gains after the Federal Reserve said it was too early to consider rolling back emergency support for the economy, and US President Joe Biden proposed a $1.8 trillion stimulus package.

At the conclusion of the US central bank's latest policy meeting on Wednesday, Fed Chair Jerome Powell acknowledged the economy's growth, but said there was not yet enough evidence of "substantial further progress" toward recovery to warrant a change in policy.

At 9:49 a.m. ET the Dow Jones Industrial Average was up 132.64 points, or 0.39%, at 33,953.02, the S&P 500 was up 29.45 points, or 0.70%, at 4,212.63 and the Nasdaq Composite was up 105.39 points, or 0.75%, at 14,156.42.

McDonald's Corp rose 0.5% after beating Wall Street estimates for comparable sales and returning to pre-pandemic levels of growth.

Amazon.com Inc, Twitter Inc and Gilead Sciences Inc are set to report their earnings later in the day.

Advancing issues outnumbered decliners by a 2.24-to-1 ratio on the NYSE and by a 1.40-to-1 ratio on the Nasdaq.

The S&P index recorded 91 new 52-week highs and no new low, while the Nasdaq recorded 101 new highs and four new lows.