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* Technology stocks rally
* Big banks rise as profits beat forecasts
* UnitedHealth jumps on strong results
* Indexes up: Dow 1.6%, S&P 500 1.7%, Nasdaq 1.8% (New throughout, updates prices, market activity and comments adds dateline, changes byline)
By Caroline Valetkevitch
NEW YORK, Oct 14 (Reuters) – U.S. stocks surged on Thursday as companies including Bank of America and UnitedHealth gained following strong results, while data on the labor market and inflation soothed worries about the outlook for higher rates.
The technology sector gave the S&P 500 its biggest boost, with gains for shares of Facebook Inc, Microsoft Corp, Apple Inc and Google parent Alphabet .
Gains were broad-based, with the small cap Russell 2000 index up about 1.5%.
Citigroup, Bank of America Corp and Morgan Stanley topped quarterly earnings estimates as the rebounding economy allowed them to release more cash they had set aside for pandemic losses, while sizzling deals, equity financing and trading added to profits.
Bank of America’s shares were up about 4%.
UnitedHealth Group Inc rose 4.2% after the health insurer reported results and raised its full-year adjusted profit forecast on strength from its Optum unit that manages drug benefits.
Adding to optimism, data showed the number of Americans filing new claims for unemployment benefits last week fell close to a 19-month low, and a separate report showed producer prices eased in September.
“Some of the things that worried the market in September, and even last week, as far as the inflation aspect and higher interest rates and the Delta variant I think maybe have lessened,” said Alan Lancz, president, Alan B. Lancz & Associates Inc., an investment advisory firm, based in Toledo, Ohio.
“Not that it’s all over, but on a temporary scale at least, you can make a case for it trending in the right direction.”
The Dow Jones Industrial Average rose 542.25 points, or 1.58%, to 34,920.06, the S&P 500 gained 75.07 points, or 1.72%, to 4,438.87 and the Nasdaq Composite added 255.23 points, or 1.75%, to 14,826.87.
Also in earnings, Walgreens Boots Alliance Inc jumped after the drugstore chain reported fourth-quarter revenue and adjusted profit above estimates and forecast growth of 11% to 13% in the long term.
U.S. companies are expected to report strong quarterly profit growth for the third quarter, but investors have been keen to hear what they say about rising costs, labor shortages and supply problems.
Advancing issues outnumbered declining ones on the NYSE by a 4.02-to-1 ratio; on Nasdaq, a 2.29-to-1 ratio favored advancers.
The S&P 500 posted 31 new 52-week highs and no new lows; the Nasdaq Composite recorded 72 new highs and 38 new lows. (Additional reporting by Devik Jain in Bengaluru and Federica Urso in Gdansk; Editing by Arun Koyyur and David Gregorio)
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