Earnings gains at major U.S. companies and encouraging economic news pushed U.S. stocks to record levels Thursday.
A drop in claims for unemployment benefits signaled a healthier economy and encouraged investors to buy stocks.
The stock market is back at record levels after pulling back in June amid concerns that the Fed was poised to reduce its stimulus program. The S&P 500 has gained 5.2 percent this month and is up 18.5 percent for the year, putting it on track to log its best annual performance since 2009, when it rose 23.5 percent.
The Federal Reserve’s $85 billion of monthly bond purchases, intended to hold down long-term interest rates, has been a major factor supporting the rally in stocks. Fed Chairman Ben Bernanke told the House Financial Services Committee Wednesday that there was no “preset course” for ending the stimulus and that any change would depend on how well the economy is doing. Investors have worried that the central bank might reduce its stimulus before the economy was strong enough. Bernanke repeated the comments to the Senate Banking Committee Thursday.
“The economic data continues to be solid and there’s less concern that the Fed is going to take away the punch bowl before the economy is healthy enough to handle it,” said Alec Young, a global equity strategist at S&P Capital IQ. “On balance, earnings aren’t great but they’re coming in ahead of expectations.”
The Standard & Poor’s 500 index climbed 8.46 points, or 0.5 percent, to 1,689.37. The index has gained for 10 of the last 11 days.
The Dow Jones industrial average rose 78.02 points, or 0.5 percent, to 15,548.54. The Dow’s gains were led by IBM and UnitedHealth Group, which reported better earnings than Wall Street analysts were expecting.
The Nasdaq composite edged up 1.28 points, just 0.04 percent, to 3,611.28. The Nasdaq was held back by weak earnings reports from several major technology companies.