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* U.S. service sector unexpectedly picks up in July
* PayPal rises after bumping annual profit outlook
* Apple gains 3.5%, Microsoft adds 2.7%
* Moderna jumps on $3 billion share buyback plan
* Indexes: Dow 1.08%, S&P 1.30%, Nasdaq 2.13%
Aug 3 (Reuters) - Wall Street's major indexes surged on
Wednesday, with gains in big technology companies lifting the
Nasdaq to near three-month highs as key readings on the services
sector and new orders helped calm recession fears.
A fresh batch of strong results from PayPal and CVS Health
Corp also boosted sentiment in a largely upbeat second quarter
that has helped markets bounce back from the fallout of the
Ukraine war, rising inflation and a rise in borrowing costs.
Apple Inc rose 3.5% and Microsoft Corp
added 2.7%, helping the broader growth stocks index
outperform its value counterpart.
"An economy that is not falling into recession but is not
roaring higher at this time would have you shift away from value
stocks into growth," Kim Forrest, chief investment officer at
Bokeh Capital Management said.
PayPal Holdings jumped 9.5% as the fintech firm
raised its annual profit guidance and said activist investor
Elliott Management has an over $2 billion stake.
CVS Health Corp gained 5.4% as the largest U.S.
pharmacy chain raised its annual profit forecast after posting
strong quarterly results.
The benchmark S&P 500 index and tech-heavy Nasdaq
are up 13.3% and 18.2%, respectively, from the lows hit
in mid-June, but are still in a bear market.
Wall Street started August on a sour note as factory
activity in the United States, China and Eurozone weakened in
July. But worries eased on Wednesday as the U.S. services
sector, which accounts for more than two-third of the economic
activity, rebounded unexpectedly.
It rose in July to 56.7 from 55.3 in June amid strong order
growth, while supply bottlenecks and price pressures eased. A
separate survey showed new orders for U.S.-manufactured goods
increased solidly in June.
"(Today's) data further support our view that service-sector
activity will hold up well in the near-term," Wells Fargo
economists wrote in a note.
"The recent easing in prices may in part be due to lower in
commodity prices, but nonetheless this broad easing of price
pressure will be welcome news for policymakers tasked with
Meanwhile, Richmond Federal Reserve President Thomas Barkin
on Wednesday joined policymakers voicing determination that the
U.S. central bank is committed to getting inflation under
control and returning it to 2% target.
At 12:27 p.m. ET, the Dow Jones Industrial Average
was up 351.02 points, or 1.08%, at 32,747.19, the S&P 500
was up 53.19 points, or 1.30%, at 4,144.38, and the Nasdaq
Composite was up 263.40 points, or 2.13%, at 12,612.16.
Moderna Inc surged 15.1% after the vaccine maker
announced a $3 billion share buyback plan.
Regeneron Pharmaceuticals climbed 7.6% after it
beat quarterly revenue estimates, while coffee chain Starbucks
Corp rose 3.4% on upbeat quarterly profit.
Advancing issues outnumbered decliners by a 1.85-to-1 ratio
on the NYSE and by a 2.29-to-1 ratio on the Nasdaq.
The S&P index recorded two new 52-week highs and 30 new
lows, while the Nasdaq recorded 40 new highs and 27 new lows.
(Reporting by Aniruddha Ghosh and Devik Jain in Bengaluru;
Editing by Sriraj Kalluvila and Arun Koyyur)