Earnings send Dow, S&P to record highs
Earnings gains at major U.S. companies and encouraging economic news pushed the Dow and S&P 500 to record levels Thursday.
A drop in claims for unemployment benefits signaled a healthier economy and encouraged investors to buy stocks. The Federal Reserve Bank of Philadelphia said manufacturing in its region grew at the fastest pace in more than two years this month.
Among companies reporting second-quarter earnings, Morgan Stanley was one of the standouts, rising $1.16 to $27.70. The Manhattan bank reported sharply higher earnings driven by investment banking gains and said it planned to spend $500 million buying back its own stock. IBM rose $3.44 to $197.99 after its profit beat analysts' forecasts as software sales grew.
The market is back at record levels after pulling back in June amid concerns the Fed might reduce its stimulus program.
"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 of S&P Capital IQ.
The Standard & Poor's 500 index climbed 0.50 percent to 1,689.37. The Dow Jones industrial average rose 78.02 points to 15,548.54. The Nasdaq composite index edged up just 0.04 percent to 3,611.28.