NEW YORK (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, Amazon.com and Alphabet Inc, 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 reported holiday-quarter sales and profit that beat Wall Street expectations. However, shares of the iPhone maker fell 3.50% 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.” The Dow Jones Industrial Average rose 300.19 points, or 0.99%, to 30,603.36, the S&P 500 gained 36.61 points, or 0.98%, to 3,787.38 and the Nasdaq Composite added 66.56 points, or 0.5%, to 13,337.16. Shares in GameStop Corp and AMC Entertainment Holdings Inc tumbled more than 40% 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 fell 2.62% in choppy trading despite soundly beating quarterly revenue estimates, while Tesla lost 3.32% after posting disappointing fourth-quarter results and failing to provide a clear target for 2021 vehicle deliveries. But Comcast Corp jumped 6.57% 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. Volume on U.S. exchanges was 19.58 billion shares, compared with the 14.86 billion average for the full session over the last 20 trading days. Advancing issues outnumbered declining ones on the NYSE by a 2.22-to-1 ratio; on Nasdaq, a 1.26-to-1 ratio favored advancers. The S&P 500 posted 11 new 52-week highs and no new lows; the Nasdaq Composite recorded 87 new highs and 13 new lows.