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Wall Street higher on earnings optimism, Syria worries ebb

(Reuters) – Wall Street benchmarks bounced higher on Thursday, driven by gains in technology, financial and industrials stocks as investors hoped that lower U.S. taxes could boost first quarter corporate profits.

Traders react on the floor of the New York Stock Exchange, (NYSE) in New York, U.S., April 10, 2018. REUTERS/Brendan McDermid

Boeing’s (BA.N) 1.8 percent gain was the biggest boost to the Dow, while Microsoft’s (MSFT.O) 1.7 percent gain and JPMorgan’s (JPM.N) 2.3 percent jump helped lift the S&P 500.

The earnings season began with BlackRock Inc (BLK.N), the world’s largest asset manager, reporting quarterly profit above Wall Street estimates. Its shares rose 2.3 percent.

Big banks JPMorgan (JPM.N), Citigroup (C.N) and Wells Fargo (WFC.N) will report quarterly earnings on Friday.

“As long as we continue to be in an interest-rate hiking environment, banks are going to continue to benefit,” said Randy Frederick, Vice President of trading and derivatives for Charles Schwab in Austin, Texas.

“Trade volumes were pretty solid in the early part of the quarter…generally outlook is pretty good for financials.”

Analysts expect quarterly profit for S&P 500 companies to rise 18.5 percent from a year ago, the biggest gain in seven years, according to Thomson Reuters I/B/E/S.

At 11:20 a.m. ET, the Dow Jones Industrial Average .DJI was up 315.29 points, or 1.3 percent, at 24,504.74.

The S&P 500 .SPX rose 26.45 points, or 1 percent, to 2,668.64 and the Nasdaq Composite .IXIC was up 85.24 points, or 1.21 percent, at 7,154.27.

Fears of rising U.S.-Russia conflict in Syria eased after U.S. President Donald Trump toned down his threats, tweeting “Never said when an attack on Syria would take place. Could be very soon or not so soon at all!”

His comments came a day after he tweeted that missiles “will be coming” weighed on stock markets.

Economic data on Thursday also helped the positive sentiment. New applications for U.S. unemployment benefits fell last week, pointing to sustained labor market strength.

The data pushed yields on the U.S. 10-year Treasury notes US10YT=RR to a four-day high at 2.82 percent. [US/]

Delta Air Lines (DAL.N) jumped 2.84 percent after the U.S. carrier reported a rise in quarterly revenue, boosted by higher average fares and passenger traffic.

Other airline stocks American Airlines (AAL.O), JetBlue Airways (JBLU.O), Alaska Air Group (ALK.N) and United Continental Holdings (UAL.N) rose between 1.6 percent and 2.4 percent, lifting the Dow Jones Airlines index .DJUSAR by 2.3 percent.

Facebook (FB.O) shares fell 1 percent, after rising 5.3 percent in the past two days when Chief Executive Mark Zuckerberg testified before Congress on the data privacy scandal.

Bed Bath & Beyond (BBBY.O) shares dived more than 18 percent after the company’s full-year profit forecast missed estimates.

Advancing issues outnumbered decliners on the NYSE for a 1.64-to-1 ratio and on the Nasdaq, for a 2.57-to-1 ratio.

Reporting by Sruthi Shankar in Bengaluru; Editing by Arun Koyyur

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