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Lilly tumbles after CVS drops Zepbound

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McDonald's slips after surprise drop in Q1 sales

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Weekly jobless claims higher than forecast

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Indexes up: Dow 0.21%, S&P 500 0.63%

(Adds Amazon results, prices, trading volume data)

By Chuck Mikolajczak

NEW YORK, May 1 (Reuters) -

U.S. stocks advanced on Thursday, with the Dow and S&P 500

posting their eighth straight session of gains after strong

results from megacaps Microsoft ( MSFT ) and Meta eased concerns about

artificial intelligence spending.

Microsoft ( MSFT ) surged 7.6% and closed at its highest

level since late January, driven by an upbeat quarterly growth

forecast for its cloud-computing business Azure. The gains

briefly pushed Microsoft ( MSFT ) above Apple ( AAPL ) to become the

world's most valuable company.

Meta Platforms ( META ) gained 4.2% and closed at its

highest since April 9 after posting higher-than-expected revenue

on the back of a strong advertising performance.

The results helped allay fears the massive spending on

AI in recent years would not be rewarded, and eased concerns

that President Donald Trump's tariffs could dent economic

growth.

"It's nice that the day is being carried by earnings

rather than just talking about tariffs for a second, so it's a

little refreshing in that regard that we're talking about

economic data and earnings," said Lamar Villere, Portfolio

Manager with Villere & Co in New Orleans.

"Certainly when you see a company of Microsoft's ( MSFT ) size,

Meta's size, putting up great earnings, you would believe that

their run is not over."

The Dow Jones Industrial Average rose 83.60

points, or 0.21%, to 40,752.96, the S&P 500 gained 35.08

points, or 0.63%, to 5,604.14 and the Nasdaq Composite

gained 264.40 points, or 1.52%, to 17,710.74.

Repercussions from frequent shifts in U.S. trade policy

have hung over a solid earnings season so far, with many

companies slashing or withdrawing their profit outlooks. S&P 500

first-quarter earnings are seen growing 12.9% on an annual

basis, per LSEG data, up from the 8% growth rate seen on April

1.

After the closing bell, fellow heavyweight Amazon.com ( AMZN )

fell nearly 4% after its earnings as growth in its

cloud unit lagged, while "Magnificent Seven" peer Apple ( AAPL )

was also due to report after the closing bell.

Apple ( AAPL ) shares alternated between modest gains and losses

before closing up 0.4% after a federal judge ruled the iPhone

maker had violated a U.S. court order to reform its App Store.

Eight straight sessions of gains marked the longest run for

the Dow in a year and the longest for the S&P since August.

Tech rose 2.2% and communication services

rose 1.6%, leading sector gains.

Economic data painted a mixed picture. Weekly jobless

claims, the latest in a string of labor market data this week

ahead of Friday's government payrolls report, showed layoffs

increased more than expected last week, potentially hinting at a

pick-up in job cuts following tariffs.

ISM PMI data showed U.S. manufacturing

contracted further

in April, though slightly less than economists polled by

Reuters had expected. Input prices were elevated.

That followed Wednesday's data showing the U.S. economy

contracted for the first time in three years in the last

quarter.

Eli Lilly ( LLY ) reported quarterly results that topped

expectations, but shares tumbled 11.7% after CVS Health's ( CVS )

decision to drop Lilly's obesity drug Zepbound from some

lists of medicines it covers for reimbursement. The healthcare

sector slumped 2.8% as the worst performer on the

session.

McDonald's also reported earnings and shares

declined 1.9% to cap gains on the Dow after posting a surprise

drop in first-quarter global sales.

Mobile chip designer Qualcomm ( QCOM ) plunged 8.9% after it

forecast a hit to revenue from the trade war.

Advancing issues outnumbered decliners by a 1.31-to-1 ratio

on the NYSE and by a 1.19-to-1 ratio on the Nasdaq.

The S&P 500 posted 11 new 52-week highs and four new

lows while the Nasdaq Composite recorded 45 new highs and 66 new

lows.

Volume on U.S. exchanges was 16.15 billion shares,

compared with the 19.56 billion average for the full session

over the last 20 trading days.