Stocks advanced on Thursday as a string of solid corporate profits and a drop in the number of Americans staying on jobless benefits fueled economic recovery hopes.
A broker upgrade of General Electric Co
Gains were broad-based, but economically sensitive sectors like materials were by far the biggest standouts. The S&P materials sector index <.GSPM> gained 3.6 percent.
Companies with solid results on Thursday included mobile phone maker Motorola Inc
I guess the trend is our friend right now. The positive momentum is carrying through, and earnings for the most part have been better than anticipated, said John O'Brien, senior vice president at MKM Partners LLC in Cleveland. I think that reflects that the economy is stabilizing.
The Dow Jones industrial average <.DJI> gained 157.73 points, or 1.74 percent, to 9,228.45. The Standard & Poor's 500 Index <.SPX> rose 18.80 points, or 1.93 percent, to 993.95. The Nasdaq Composite Index <.IXIC> jumped 31.56 points, or 1.60 percent, to 1,999.32.
Earlier the S&P 500 climbed to an intraday high of 996.68, its highest level since early November 2008, and the Nasdaq hit its highest level since October 2008. The S&P 500 is now up 47 percent from the 12-year closing low of March 9, but down 37 percent from its record-high close in October 2007.
Data on Thursday showed initial claims for state unemployment insurance benefits rose 25,000 to a seasonally adjusted 584,000 in the week ended July 25, the Labor Department said, a touch above market expectations for a reading of 570,000.
However, the four-week moving average for new claims, considered to be a better gauge of underlying trends as it irons out week-to-week volatility, fell by 8,250 to 559,000. This was the lowest level since late January.
Continuing claims -- the number of people staying on the benefit rolls after collecting an initial week of aid -- fell by 54,000 to 6.20 million in the week ended July 18, the lowest since early April.
Goldman Sachs raised its recommendation on General Electric
U.S. House Financial Services Committee Chairman Barney Frank in an interview with Bloomberg late on Wednesday suggested there was broadening support for regulatory reform that would not mandate the separation of GE Capital, Goldman analysts said.
GE shares rose 6.8 percent to $13.09. On Nasdaq, iPhone maker Apple Inc
But Exxon Mobil Corp
Investors later on Thursday will watch a record $28 billion 7-year note auction from the U.S. Treasury, though there could be caution following poor demand for two government auctions earlier this week.
(Editing by Padraic Cassidy)