U.S. shares surged, reversing a two-day decline, as consumer and technology stocks rose and reports indicated that household spending climbed by the highest margin in nearly three months.
Cognizant Technology Solutions Corp. jumped 5.3 percent to $50.09 after Morgan Stanley reviewed its stock upwards to a buy. Zynga Inc. rose 1.3 percent to $4.53 after billionaire investor increased his shareholding from 2.2 percent to 5.3 percent. Cohen, who is the founder of SAC Capital Advisors LP, owns 38.7 million shares valued at $173 million at the current market prices.
Restoration Hardware gained 11 percent to $71.09 after it forecasted an adjusted first quarter profit of between 9 cents per share and 11 cents, beating analysts’ estimates of 6 cents. It also disclosed that full-year profit will touch as much as $2.22 per share, exceeding the prediction of $2.18.
PG&E Corp. plummeted 4 percent to $41.88 after it disclosed that it might face a lawsuit over a 2010 explosion of a natural gas pipeline that resulted in eight fatalities. The U.S. Attorney’s office will file criminal charges against the company, stating that it violated the federal Pipeline Safety Act.
The S&P 500 Index surged 0.8 percent to 1,863.92 as of 10.40 a.m., New York time, while the Dow Jones Industrial Average rallied 0.7 percent, or 120.87 points, to 16,385.10. The Nasdaq Composite Index rose 1.1 percent, paring its weekly decline to 1.9 percent.
“We’re seeing a little bit of a recoil rally after the profit taking over the past couple weeks,” Eric Marshall, a Dallas-based portfolio manager at Hodges Funds told Bloomberg. The firm oversees about $2 billion. “We’ve seen some sector rotation more to the quality names. That’s a healthy sign.”
The S&P had decline for its fourth straight day on Thursday after technology firms and banks fell; hence Friday’s rally reversed its losses, making it rise 0.8 percent higher in this quarter.
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