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U.S. stocks closed higher on Thursday, with the technology heavyweights rallying ahead of major earnings reports and upbeat domestic economic data calming investor jitters about surging coronavirus cases. The TSX also closed higher, despite Canadian tech darling Shopify falling nearly 5%. Shopify reported quarterly results better than analyst expectations, but investors cooled to the results after the company cautioned not to expect its huge pandemic-related gains to continue.

The rebound came after a more than 3% slide a day earlier in Wall Street’s main indexes, and a 2.7% rally in the TSX, underscoring heightened market volatility ahead of the presidential election next week and growing fears of another COVID slowdown.

Stocks rallied as investors anticipated strong results from a line-up of the biggest names in the U.S. corporate universe - Apple Inc, Amazon.com Inc, Alphabet Inc and Facebook Inc - due after market close.

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“The earnings season so far has resulted in significant positive earnings surprises,” said Tim Ghriskey, chief investment strategist at Inverness Counsel in New York. “We think that’s helping to fuel today’s rally in anticipation of positive surprises from these companies.”

Tech companies have seen demand surge for their products and services from people stuck at home during the pandemic. A better-than-expected earnings report from Pinterest Inc , which forecast a rebound in ad spending, helped spur the rally. Shares of the image-sharing company soared more than 28%.

The NYSE FANG+TM Index jumped 3.2%. Communication services, materials and technology rose the most among major S&P sectors.

Sentiment also got a boost from data showing the U.S. economy grew at a record pace in the third quarter after the government poured out more than $3 trillion of pandemic aid. A separate report showed weekly unemployment claims fell last week.

“It’s positive data, but it’s a little bit backward looking because you have COVID-19 cases on the rise again which doesn’t really send a strong signal about the fourth quarter,” said Shawn Snyder, head of investment strategy at Citi Personal Wealth Management in New York.

The CBOE volatility index surged to a 15-week high this week due to lack of fiscal stimulus, while the White House coronavirus task force urged for aggressive measures to curb the pandemic.

Democratic challenger Joe Biden holds a comfortable lead over President Donald Trump in national polls, but the race in battleground states that will likely decide the election are tighter than the national surveys.

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Unofficially, the Dow Jones Industrial Average rose 139.03 points, or 0.52%, to 26,658.98, the S&P 500 gained 39.11 points, or 1.20%, to 3,310.14 and the Nasdaq Composite added 180.73 points, or 1.64%, to 11,185.59.

The S&P/TSX Composite Index rose 84.13 points, or 0.54%, at 15,670.70. Both financials and materials sectors posted gains, rising 1.31% and 1.50% respectively.

Gold prices dropped to one-month lows, hurt by a stronger dollar and lack of clarity on a U.S. stimulus agreement, while concerns over a spike in COVID-19 cases and uncertainty ahead of U.S. elections limited losses. U.S. gold futures settled down 0.6% to $1,868.

The TSX energy sector edged down just 0.12% despite another big drop in crude oil. Crude oil fell again on Thursday as lockdowns in Europe and rising cases elsewhere clouded the demand outlook.

The December crude contract was down US$1.22 at US$36.17 per barrel.

Read more: Stocks that saw action Thursday - and why

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Reuters, Globe staff

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