Shares of tech companies rallied after strong earnings from four of the largest companies quelled fears about valuations. Shares of Amazon.com surged after the online retailer posted earnings ahead of Wall Street expectations as its sales growth allowed it to absorb aggressive investments in new business areas. Analysts at brokerage Wells Fargo said Amazon's "adaptive" technology was allowing it to rapidly grow in new directions, a trend that could continue with its integration of grocery Whole Foods Market and approval for pharmaceutical distribution licenses. Shares of Google parent Alphabet rose sharply after its quarterly profit far exceeded estimates from Wall Street analysts, helped by growth in its core search-and-advertising business. Microsoft shares rallied after its push into cloud computing and other areas helped bolster profit growth. Intel rallied after the chip maker boosted its outlook for profits this year. The robust growth rates seemed to justify the lofty valuations that many of these companies are assigned on the stock market. "In any case, just for the overall tone of the market at these valuations you have to see dynamism in earnings, you have to see growth on the top line and bottom line," said Quincy Krosby, chief market strategist at Prudential Financial. "You have to see the macro and the micro [economics] moving in a positive trajectory to maintain these valuations."
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(END) Dow Jones Newswires
October 27, 2017 16:31 ET (20:31 GMT)