US STOCKS-Wall St closes higher as upbeat Cisco and Disney results help fuel optimism

(For a Reuters live blog on U.S., UK and European stock
markets, click LIVE/ or type LIVE/ in a news window)
(Updates to close, adds commentary)
By Sinéad Carew
NEW YORK, Nov 13 (Reuters) - Wall Street closed higher on
Friday with upbeat earnings reports helping to drive optimism
about the economy along with hopes for successful COVID-19
vaccines even as investors monitored a surge in virus cases and
restrictions around the country.
After a volatile trading week where the market was whipsawed
between hopes and fears around the virus, Cisco Systems Inc
CSCO.O provided the biggest boost to the S&P 500 after its
quarterly report showed a work-from-home driven surge in demand.
Walt Disney Co DIS.N also rose as its rapidly growing
streaming video business, and a partial recovery at its theme
parks tempered its quarterly loss. "At least for today it looks like sentiment regarding the
potential for vaccines combined with very strong earnings
announcements from a number of companies has investors hopeful
that the economy can continue to recover," said Michael Arone,
chief investment strategist at State Street Global Advisors.
Unofficially, the Dow Jones Industrial Average .DJI rose
378.85 points, or 1.3%, to 29,459.02, the S&P 500 .SPX gained
46.99 points, or 1.33%, to 3,584 and the Nasdaq Composite
.IXIC added 113.97 points, or 0.97%, to 11,823.55.
Friday's outperformance of more economically sensitive
sectors including energy .SPNY , and industrials .SPLRCI over
growth sectors like technology .SPLRCT was a clear indication
of "optimism around the economy getting back on its footing,"
said Tom Martin, senior portfolio manager at Globalt Investments
in Atlanta.
The three major U.S. stock indexes had fallen on Thursday as
more than a dozen U.S. states reported a doubling of new
COVID-19 cases in the last two weeks, with Chicago's mayor
issuing a month-long stay-at-home advisory. But a senior adviser to President-elect Joe Biden said
there were no plans for nationwide lockdowns next year and
instead talked about restrictions for specific regions when the
virus spread is bad there.
State Street's Arone said the aversion to a full lockdown
likely cheered up some investors. But he was concerned that
investor optimism may be overdone, particularly as Fed officials
have been warning about the potential damage rising virus cases
could do to the economy without a fresh economic stimulus
package in sight.
"The market is underestimating some of the impact that
rising cases and no stimulus will have on the economy and
earnings and they're over estimating the potential timeline and
breadth of a vaccine distribution," Arone said.
"In the spring folks were bracing for the worst and the
worst didn't happen. Now they're expecting the best and they may
be a little too rosy."
Positive data from Pfizer's PFE.N vaccine study earlier
this week had prompted a rotation into the cyclical sectors,
boosting the S&P 500 .SPX and Dow .DJI .
The tech-heavy Nasdaq .IXIC , however, underperformed as
investors booked profits in technology stocks, which have
benefited from a stay-at-home environment.
Globalt's Martin also pointed to hopes for news of more
coronavirus vaccine progress, after Moderna Inc MRNA.O said
earlier this week that it had enough data for a first interim
analysis of its late-stage trial. With third-quarter reports released from about 90% of S&P
500 companies Refinitiv IBES estimates now show profits falling
7.8% from last year compared with an Oct. 1 expectation for a
21.4% slump.
Meanwhile, Biden's victory in the battleground state of
Arizona expanded his electoral vote margin, but the official
transition remains in limbo as President Donald Trump refuses to
concede. Value stocks .RLV , which include mostly cyclical sectors
such as banks and energy, outperformed the growth index .RLG ,
which is largely comprised of tech companies.