US STOCKS-Wall St rebounds as earnings heat up, short worries cool

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* Weekly jobless claims dip, but remain high
* Q4 GDP grows at consensus-matching 4% rate
* GameStop, AMC fall as platforms restrict trading

(Updates to market close)
By Chuck Mikolajczak
NEW YORK, Jan 28 (Reuters) - U.S. stocks closed higher on
Thursday, bouncing from sharp losses in the prior session,
thanks to a broad rally as earnings season got off to a strong
start and fears lessened around hedge funds selling long
positions to cover shorts.
Heavyweights, including Microsoft Corp MSFT.O , Amazon.com
AMZN.O and Alphabet Inc GOOGL.O , were among the biggest
boosts to the S&P 500, a day after the three major U.S. indexes
suffered their biggest daily percentage drop in three months.
Apple AAPL.O reported holiday-quarter sales and profit
that beat Wall Street expectations. However, shares of the
iPhone maker fell after climbing about 7% to start the year.
With quarterly earnings season in full swing, market
participants have looked to whether companies could justify high
valuations, with the forward price-to-earnings ratio on the
benchmark S&P index near 20-year highs at almost 22.7.
"By and large the surprises have been positive, even more so
than typical and by and large companies are showing positive
operating leverage where they are able to grow earnings a little
bit faster than they are able to grow revenue," said Ellen
Hazen, portfolio manager at F.L.Putnam Investment Management in
Wellesley, Massachusetts.
"It is still early days where we are only a third of the way
through the S&P but the surprises look more positive than usual
and that bodes well as an outlook for the economy and for the
markets."
Unofficially, the Dow Jones Industrial Average .DJI rose
300.75 points, or 0.99%, to 30,603.92, the S&P 500 .SPX gained
36.49 points, or 0.97%, to 3,787.26 and the Nasdaq Composite
.IXIC added 66.56 points, or 0.5%, to 13,337.16.
Shares in GameStop Corp GME.N and AMC Entertainment
Holdings Inc AMC.N tumbled after a meteoric rise in recent
sessions in a social media-driven trading frenzy that shook
stock markets. Trading platforms, including Robinhood and
Interactive Brokers, restricted trading in several stocks that
soared this week, easing concerns about a ripple effect to the
broader market. "Trading platforms are not going to want to stick their
necks out and be on the frontline of what they may see as a
reckless war, in part, against the elite and the system of Wall
Street that's being democratized by information and the social
media," said Eric Schiffer, chief executive officer of private
equity firm the Patriarch Organization.
Of the 159 companies in the S&P 500 that reported earnings
through Thursday morning, 83% posted results that topped analyst
expectations, according to Refinitiv data, well above the 76%
beat rate over the past four quarters.
Facebook FB.O fell in choppy trading despite soundly
beating quarterly revenue estimates, while Tesla lost ground
after posting disappointing fourth-quarter results and failing
to provide a clear target for 2021 vehicle deliveries.

But Comcast Corp CMCSA.O jumped after it reported
better-than-expected fourth-quarter revenue, as broadband demand
continued to offset pandemic-related weakness in its theme park
and filmed entertainment businesses. A Commerce Department report showed fourth-quarter gross
domestic product increased at a 4% annualized rate, in line with
expectations, as the virus and lack of another spending package
curtailed consumer spending, while a separate report showed
847,000 more people filed jobless claims last week, lower than
the 875,000 estimate.