U.S. stocks surged on Thursday as a drop in the number of Americans on jobless benefits and a batch of solid corporate profit reports bolstered hope for an economic recovery.
The market's rally pushed the benchmark S&P 500 index to its highest intraday level in 9 months, putting it just points away from the psychologically important 1,000 level.
The Treasury Department's auction of a record $28 billion of 7-year notes attracted solid demand and added to Wall Street's optimistic mood. Stocks extended gains after the auction's results were announced.
The advance was broad-based, but economically sensitive sectors like materials were by far the biggest standouts. The S&P materials sector index <.GSPM> gained 3.8 percent.
Companies reporting better-than-expected results on Thursday included mobile phone maker Motorola Inc
A major positive influence before the opening bell was the Labor Department's report showing initial claims for state unemployment insurance benefits rose 25,000 in the week ended July 25, a tad above market expectations.
However, the four-week moving average for new claims, considered to be a better gauge of underlying trends as it irons out volatility, fell 8,250 to 559,000, the lowest level since January.
We saw the long-term claims start to shrink, which is giving people hope that the bottom
If the worst is behind us, then tremendous growth must be ahead of us. That (thought) is what's driving this rally.
The Dow Jones industrial average <.DJI> jumped 158.10 points, or 1.74 percent, to 9,228.82. The Standard & Poor's 500 Index <.SPX> rose 18.28 points, or 1.87 percent, to 993.43. The Nasdaq Composite Index <.IXIC> climbed 27.51 points, or 1.40 percent, to 1,995.27.
Earlier, the S&P 500 climbed to an intraday high of 996.68, its highest level since early November 2008, and the Nasdaq rose above 2,000, touching its highest level since October 2008. 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.
Adding to the buoyance, Goldman Sachs upgraded General Electric
GE's stock shot up 8.6 percent to $13.31 on the New York Stock Exchange.
On Nasdaq, iPhone maker Apple Inc
But Exxon Mobil Corp
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.
In the jobs report, continuing claims -- the number of people staying on the benefit rolls after collecting an initial week of aid -- fell 54,000 to 6.20 million in the week ended July 18, the lowest since early April.
(Reporting by Rachel Chang; Editing by Jan Paschal)