Wall Street gains on Amazon boost, robust GDP data

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NEW YORK (July 27): US stocks rose on Friday as bumper earnings from Amazon lifted consumer discretionary stocks and data showed that the US economy grew at its fastest pace in nearly four years.

A Commerce Department report showed that gross domestic product increased at a 4.1% annualized rate in the second quarter as consumers boosted spending and farmers rushed shipments of soybeans to China to beat retaliatory trade tariffs.

Amazon.com jumped as much as 4% to hit a record high of US$1,880, the biggest boost to the Nasdaq and the S&P 500.

The rise in the online retailer's shares also led the consumer discretionary sector 0.79% higher.

"At the end of the day, it really is about what is truly going on in the market and what is truly going on is earnings," said J.J. Kinahan, chief market strategist at TD Ameritrade in Chicago.

"There just seems to be a lot of evidence the economy is really humming right along. The only part of the economy that seems to be struggling is wages. But everything else, it is really hard to argue with."

Earnings of S&P 500 companies are now expected to rise 22.6% in the second quarter, compared with an estimate of 20.7% as of July 1, according to Thomson Reuters I/B/E/S.

Only four of the 11 main S&P sectors were lower, with technology's 0.5% drop the steepest.

Intel's 7.9% drop was the biggest drag on Wall Street's main indexes after its fast-growing data center business missed estimates.

Advanced Micro Devices, which is expected to have eaten into Intel's market share, was up 5.2% .

Twitter plunged 16.3% after reporting fewer-than-expected monthly active users and warning that the closely-watched figure could keep falling as it deletes phony accounts.

At 9:58am EDT the Dow Jones Industrial Average was up 18.65 points, or 0.07%, at 25,545.72, the S&P 500 was down 0.78 points, or 0.03%, at 2,836.66 and the Nasdaq Composite was down 6.47 points, or 0.08%, at 7,845.72.

Exxon Mobil dropped 3.6%, while Chevron fell 0.8% and weighed on energy companies after their quarterly results fell far short of Street's expectations.

Chesapeake Energy jumped 8.2% after it planned to sell all of its Ohio natural gas acreage to privately owned Encino Acquisition Partners for about US$2 billion.

Electronic Arts fell 6.7% after the game publisher forecast tepid second-quarter revenue growth.

Advancing issues outnumbered decliners by a 1.23-to-1 ratio on the NYSE and for a 1.30-to-1 ratio on the Nasdaq.

The S&P index recorded 20 new 52-week highs and three new lows, while the Nasdaq recorded 56 new highs and 32 new lows.