*

Indexes up: Dow 0.42%, S&P 500 0.67%, Nasdaq 0.98%

*

White House confirms Trump-Xi meeting as part of next

week's

Asia trip

*

IBM ( IBM ) slumps on recording cloud software slowdown

*

Quantum computing firms gain on report of US govt stake

talks

(Updates to afternoon)

By Stephen Culp

NEW YORK, Oct 23 (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 ( 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 ( MOH )

plunged 18.1% after slashing its annual profit forecast.

Honeywell ( HON ) raised its annual profit forecast on

strong aerospace demand, sending its shares up 7.5%.

American Airlines ( AAL ) shares advanced 7.1% after the

carrier raised its annual profit forecast, while Southwest

Airlines ( LUV ) 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 ( IONQ ), D-Wave Quantum ( QBTS ), Quantum Computing ( QUBT )

and Rigetti Computing ( RGTI ) 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 ( XOM ) and Chevron ( CVX )

advanced 1.3% and 1.1%, respectively.

Independent oil refiner Valero Energy ( VLO ), 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.