* Optimism about global interest-rate cuts buoy sentiment
* GDP data shows U.S. economy shrank less than expected
* Colgate-Palmolive, Exxon Mobil top profit estimates
* Dow up 1.8 pct, S&P 500 and Nasdaq gain 2.2 pct
(Updates to mid-afternoon, changes byline)
By Leah Schnurr
NEW YORK, Oct 30 (Reuters) - U.S. stocks gained on
Thursday, buoyed by hopes that interest-rate cuts by global
central banks, including the U.S. Federal Reserve, will help
stave off a prolonged downturn.
Investors also found support in signs that efforts to
loosen up clogged credit markets were taking hold as the rate
that banks charge to lend dollars to each other fell, freeing
up cash needed to avert a sharp slowdown.
Colgate-Palmolive Co rose 8.4 percent to $65.05
on the New York Stock Exchange after the consumer products
maker posted quarterly profit that beat estimates.
Although data showed the U.S. economy experienced its
sharpest contraction in seven years in the third quarter, the
reading on gross domestic product was slightly better than
expected.
"As the central bank interventions and interest-rate
easings find their way into the markets and show signs of
having a positive impact on borrowing costs, it then allows
the market to really focus on more of the economic
fundamentals and debate the question of just how severe the
downturn's going to be and just how long it's going to be,"
said Craig Peckham, equity trading strategist at Jefferies &
Company in New York.
The Dow Jones industrial average rose 163.68 points, or
1.82 percent, to 9,154.64. The Standard & Poor's 500 Index
gained 20.20 points, or 2.17 percent, to 950.29. The Nasdaq
Composite Index climbed 36.09 points, or 2.18 percent, to
1,693.30.
On Nasdaq, shares of Apple Inc, maker of the iPhone and
iPod, rose 6.9 percent to $111.76, while Intel shot up 6.5
percent to $15.91.
Technology shares are among the sectors that analysts see
poised to be the biggest beneficiaries in an economic
revival.
The market's gains came a day after the Fed cut its
benchmark fed funds rate for overnight bank loans by 50 basis
points, or a half-percentage point, to 1 percent. The move was
followed by rate cuts in Taiwan, Hong Kong and China.
Japan is expected to cut rates on Friday, while the
European Central Bank, the central bank of Australia and the
Bank of England are expected to cut rates next week.
But investors remain concerned that the efforts to shore
up the economy might take longer to yield sustainable results
and brighten the profit picture.
Exxon Mobil fell 1.3 percent to $73.72 as some investors
sold the stock in a bout of profit-taking after the major oil
company's profit exceeded expectations.
Shares of Hartford Financial Services Group Inc dove 49.2
percent to $10.10 after the property and life insurer reported
a surprisingly large quarterly loss, raising concern that it
may need to raise more capital.
Prudential Financial Inc shed 13.4 percent to $30.54 the
day after it swung to a quarterly loss that marginally missed
the Street's expectations.
(Editing by Jan Paschal)
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