U.S. stocks jumped on Thursday as solid corporate profit reports and a drop in the number of Americans on jobless benefits gave investors reasons to buy equities following the S&P 500's two days of losses.
The market's rally pushed the benchmark S&P 500 index to its highest intraday level in nine months, putting it less than 4 points away from the psychologically important 1,000 level. The Nasdaq briefly rose above 2,000 for the first time since October.
Stocks got an extra push after the Treasury Department's auction of a record $28 billion of 7-year notes attracted solid demand. Strong bids on U.S. debt diminish the chance of a rise in borrowing costs.
The advance was broad-based, but a surge in commodity prices gave an extra boost to raw materials shares. The Reuters/Jefferies CRB index <.CRB>, a gauge of 19 commodities' prices, rose 3.8 percent, its biggest daily gain since early April. The S&P materials index <.GSPM> jumped 3.6 percent.
Companies reporting better-than-expected results on Thursday included mobile phone maker Motorola Inc
The upward move is partly due to positive earnings reports this morning, a pickup in commodity prices and also investors who missed the recent advance, said Michael Sheldon, chief market strategist at RDM Financial in Westport, Connecticut.
The fact that any recent pullbacks have been shallow seems to be an indication of strength, leaving investors to buy dips rather than sell rallies.
The Dow Jones industrial average <.DJI> gained 155.84 points, or 1.72 percent, to 9,226.56. The Standard & Poor's 500 Index <.SPX> added 19.04 points, or 1.95 percent, to 994.19. The Nasdaq Composite Index <.IXIC> rose 31.22 points, or 1.59 percent, to 1,998.98.
The S&P 500 is up 47 percent from the 12-year closing low of March 9, but still down 37 percent from its record high close in October 2007.
On the economic front, U.S. government data showed initial claims for state unemployment insurance benefits rose a tad above market expectations in the week ended July 25.
However, the four-week moving average for new claims, considered to be a better gauge of underlying trends as it irons out volatility, fell to its lowest level since January.
Goldman Sachs upgraded General Electric
GE's stock shot up 8.6 percent to $13.31 on the New York Stock Exchange.
On Nasdaq, UBS initiated coverage of Internet companies Google Inc
So far, 75 percent of the S&P 500 companies that have reported results have beaten expectations for the second quarter, according to Thomson Reuters data.
(Editing by Jan Paschal)