By Stephen Culp NEW YORK (Reuters) -Wall Street advanced on Thursday, reclaiming ground lost in Wednesday's selloff as investors mulled a mixed batch of corporate earnings and mounting geopolitical concerns. All three major U.S. stock indexes were higher, with tech strength nudging the Nasdaq ahead of the pack. But the small-cap Russell 2000 was the clear outperformer. The indexes gained some momentum after the White House confirmed U.S. President Donald Trump will meet Chinese President Xi Jinping next week as part of his trip through Asia. Trade tensions between Washington and Beijing have been escalating in recent days, marked by tit-for-tat retaliatory measures announced by both sides. Confirmation that the two leaders would meet next week appeared to ease those tensions. Trump announced sanctions against Russian oil companies, marking a sharp policy shift in ramping up the pressure on Moscow over its war against Ukraine, ratcheting up geopolitical strife and sending world oil prices jumping. "Earnings definitely matter, and in the main, earnings are still coming in better than expected with a higher beat rate," said Thomas Martin, senior portfolio manager at GLOBALT in Atlanta. "But there's some fairly large macro things going on with regard to, the announcements about oil sanctions and China and the potential tariffs." Third-quarter reporting season has hit full stride. Tesla shares rebounded, gaining 1.3% following its third-quarter profit miss. The electric-vehicle maker was the first of the "Magnificent Seven" group of megacap momentum stocks that account for more than a third of the S&P 500's market cap. IBM dropped 1.3% after reporting a slowdown in its key cloud software segment, eclipsing its earnings beat. So far, just over a quarter of the companies in the S&P 500 have reported third-quarter results. Of those, 86% have beaten consensus expectations, according to LSEG data. In aggregate, analysts currently expect S&P 500 third-quarter earnings growth of 9.9% year-on-year, up from their 8.8% growth estimate as of October 1, per LSEG. In other earnings, health insurer Molina Healthcare plunged 18.1% after slashing its annual profit forecast. Honeywell raised its annual profit forecast on strong aerospace demand, sending its shares up 7.5%. American Airlines shares advanced 7.1% after the carrier raised its annual profit forecast, while Southwest Airlines slipped 5.8% despite posting a surprise quarterly profit and record current-quarter sales. T-Mobile dipped 3.4% even after the telecom's wireless subscriber adds surpassed analyst expectations. Dow reported a smaller-than-expected quarterly loss as cost cuts and higher volumes helped offset weakness in chemical prices. Its stock jumped 12.0%. The Dow Jones Industrial Average rose 196.87 points, or 0.42%, to 46,787.65, the S&P 500 gained 44.97 points, or 0.67%, to 6,744.37 and the Nasdaq Composite gained 221.79 points, or 0.98%, to 22,962.19. Quantum computing firms were a bright spot after the Wall Street Journal reported that the Trump administration was in talks with several of them to take equity stakes in exchange for federal funding. IonQ, D-Wave Quantum, Quantum Computing and Rigetti Computing added between 5.2% and 11.9%. Energy companies, buoyed by spiking crude prices in the wake of Trump's sanctions on Russian oil, enjoyed the biggest percentage gain among the 11 main sectors of the S&P 500, rising 1.7%. Oil majors Exxon Mobil and Chevron advanced 1.3% and 1.1%, respectively. Independent oil refiner Valero Energy, which reported better-than-expected third-quarter profits, rose 6.9%. Rising geopolitical turmoil has benefited aerospace and defense stocks over the past year. The S&P 500 Aerospace and Defense index advanced 2.0%. Advancing issues outnumbered decliners by a 2.1-to-1 ratio on the NYSE. There were 167 new highs and 45 new lows on the NYSE. On the Nasdaq, 3,037 stocks rose and 1,538 fell as advancing issues outnumbered decliners by a 1.97-to-1 ratio. The S&P 500 posted 13 new 52-week highs and four new lows while the Nasdaq Composite recorded 65 new highs and 69 new lows. (Reporting by Stephen Culp; Additional reporting by Pranav Kashyap and Twesha Dikshit in BengaluruEditing by Marguerita Choy)
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