Stocks rose for the third straight day on Thursday, sparked by results from Bank of America and Morgan Stanley and as the latest jobless claims dropped to a near four-year low.
The S&P 500 hit a fresh five-month high, with the industrials, consumer discretionary stocks and financials leading gains.
Tech shares advanced ahead of earnings from a number of bellwethers expected after the close.
But reports after the bell were mixed. Google
Google was the big disappointment because so much of their emphasis is developing products, specifically Android, where more dollars are going out than they anticipated, said Kim Forrest, senior equity research analyst at Fort Pitt Capital Group in Pittsburgh.
In the regular session, Bank of America Corp
We think (financials) have pretty much bottomed here in the U.S., said Paul Simon, chief investment officer at Tactical Allocation Group in Birmingham, Michigan.
They represent some compelling value. We think a lot of the bad news has been discounted, and you've seen stock prices rallying in the beginning of the year, said Simon, whose firm has been buying financials.
Financial shares have rallied since the start of the year. The S&P financial index <.GSPF> is up 8.1 percent so far for 2012, helping to push the S&P 500 up 4.5 percent for the year.
In the latest snapshot of the U.S. economy, data showed the number of Americans filing for new jobless benefits dropped to nearly a four-year low last week. It added to views that the economy is slowly moving forward.
The Dow Jones industrial average <.DJI> rose 45.03 points, or 0.36 percent, to end at 12,623.98. The Standard & Poor's 500 Index <.SPX> gained 6.46 points, or 0.49 percent, to 1,314.50. The Nasdaq Composite Index <.IXIC> climbed 18.62 points, or 0.67 percent, to close at 2,788.33.
Semiconductor stocks also advanced, with the PHLX SOX Index <.SOX> rising 1.9 percent. Xilinx Inc
IBM UP LATE, AMEX SLIPS
Among other major tech companies reporting after the close, IBM
Shares of Microsoft
In a sign of optimism about Europe, both Spain and France drew strong demand at government debt auctions.
With the S&P 500 having broken above the 1,300 level, it looks set to hit the 1,360-1,370 area, said Bruce Zaro, chief technical strategist at Delta Global Asset Management in Boston.
That (area) represents the May 2011 high ... and I believe we will see that during this earnings season, Zaro said.
The Dow Jones Transportation Average <.DJT> gained 1.6 percent, with shares of Union Pacific Corp
Volume totaled about 7.6 billion shares traded on the New York Stock Exchange, NYSE Amex and Nasdaq, above the daily average of 6.68 billion, and the highest since December 16.
Advancing stocks outnumbered declining ones by a ratio of about 2 to 1 on the New York Stock Exchange. On the Nasdaq, nearly three stocks rose for every two that fell.
(Reporting By Caroline Valetkevitch; Additional reporting by Ryan Vlastelica and Rodrigo Campos; Editing by Jan Paschal)