January 31, 2019 / 6:22 PM / 6 months ago

US STOCKS-S&P, Nasdaq extend rally after Facebook earnings, trade talks eyed

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* Facebook on track for its best day since Jan 2016

* DowDuPont top decliner on Dow as revenue misses

* S&P set for best monthly performance since Oct 2015

* Details awaited on U.S.-China trade talks

* Dow off 0.24 pct, S&P up 0.69 pct, Nasdaq jumps 1.33 pct (Updates to early afternoon)

By Sruthi Shankar

Jan 31 (Reuters) - The S&P 500 and the Nasdaq extended a rally on Thursday, as strong earnings from Facebook Inc added to optimism following the Federal Reserve’s dovish remarks, while investors waited for the outcome of the U.S.-China trade talks.

Facebook jumped 12.2 percent, on track to post its best day since January 2016, after its quarterly profit topped analysts’ estimates, showing that advertisers were still flocking to spend money on the service even after a series of high profile embarrassments.

General Electric Co soared 14.7 percent after the industrial conglomerate beat estimates for quarterly sales and cash flow and said it expects industrial revenue to rise by low to mid single-digit percent in 2019.

Stocks took heart from the Fed’s pledge on Thursday that it would be patient in raising interest rates further this year, easing investor concerns about tightening financial conditions crimping economic growth.

“There were positive earnings from key companies but mostly it’s a follow through from yesterday’s rally,” said Scot Lance, managing director at Titus Wealth Management in Larkspur, California.

With fourth-quarter earnings largely exceeding market expectations and the Fed striking a more flexible tone, the S&P 500 is on track to post its best monthly performance since October 2015.

Of the 210 S&P 500 companies that have reported fourth-quarter results, 71 percent have topped profit estimates, according to Refinitiv data.

Investors are awaiting the conclusion of the high-level talks between the United States and China, aimed at easing a six-month-old trade war that has battered financial markets.

U.S. President Donald Trump expressed optimism about the trade talks, but said no final deal would be made until he meets with Chinese President Xi Jinping in the near future.

“There is a lot of wishful thinking about the trade negotiations yielding to a long-tem beneficial plan for both parties. Because despite positive earnings and a strong global economy, the trade issue still remains an overhang,” said Lance.

At 12:57 p.m. ET the Dow Jones Industrial Average was down 58.98 points, or 0.24 percent, at 24,955.88, the S&P 500 was up 18.56 points, or 0.69 percent, at 2,699.61 and the Nasdaq Composite was up 95.79 points, or 1.33 percent, at 7,278.87.

The S&P communications services sector gained 3.68 percent, leading gains among the 11 major S&P sectors.

Charter Communications Inc jumped 14.6 percent after topping quarterly revenue estimates, as the cable operator attracted more customers for its internet services.

The Dow was dragged down by losses in DowDuPont Inc , which fell 8.5 percent after the chemical maker’s revenue fell short of expectations. The S&P materials sector dropped 1.4 percent.

Microsoft Corp declined 1.4 percent as its Azure cloud computing sales grew at a slower pace than a year earlier, although its quarterly results and forecast topped Wall Street estimates.

Intel Corp slipped 2.2 percent after the chipmaker named interim Chief Executive Officer Robert Swan to the role on a permanent basis.

Advancing issues outnumbered decliners for a 2.47-to-1 ratio on the NYSE and a 1.73-to-1 ratio on the Nasdaq.

The S&P index recorded 23 new 52-week highs and no new lows, while the Nasdaq recorded 38 new highs and 18 new lows. (Reporting by Sruthi Shankar and Shreyashi Sanyal in Bengaluru; Editing by Shounak Dasgupta)

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