Stocks rose for the third straight day Thursday, helped by results from Bank of America and Morgan Stanley and a report showing that the latest jobless claims dropped to a near four-year low.
The Standard Poor’s 500-stock index hit a five-month high, with the industrials, consumer discretionary stocks and financials leading gains.
Tech shares advanced, with earnings from a number of bellwether companies expected after the close. But those reports were mixed. Google fell short of Wall Street’s expectations, and its shares dropped 10 percent in after-hours trading.
“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 climbed 2.4 percent to $6.96 after it reported a fourth-quarter profit from a loss a year earlier. Morgan Stanley reported a loss that was narrower than expected, prompting a 5.4 percent jump in its stock to $18.28.
Financial stocks “have pretty much bottomed here in the U.S.,” said Paul J. Simon, chief investment officer at Tactical Allocation Group in Birmingham, Mich.
“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 Mr. Simon, whose firm has been buying financials.
Financial shares have rallied this year. The S. P. financial index is up 8.1 percent for 2012, helping to push the S. P. 500 up 4.5 percent for the year.
In the latest snapshot of the economy, data showed the number of Americans filing for new jobless benefits dropped last week to the fewest since April 2008. It added to views that the economy is slowly advancing.
“The broad-brush impression from the data is that it’s a Goldilocks setup — inflation tame, but economic growth showing signs of accelerating,” said Greg Anderson, senior currency strategist at Citigroup in New York.
The Dow Jones industrial average rose 45.03 points, or 0.36 percent, to end at 12,623.98. The Standard Poor’s 500-stock index gained 6.46 points, or 0.49 percent, to 1,314.50. The Nasdaq composite index climbed 18.62 points, or 0.67 percent, to close at 2,788.33.
The Treasury’s 10-year note fell 24/32, to 100 5/32. The yield rose to 1.98 percent, from 1.90 percent late Wednesday.
American Express also posted results after the close, and its shares slid 1.9 percent in extended trading to $49.98.
In a sign of optimism about Europe, Spain and France drew strong demand at government debt auctions.
The FTSEurofirst 300 index of top European shares closed up 1.1 percent at 1,046.30, near five-and-a-half-month highs. World stocks, as measured by the MSCI All World index, rose 0.9 percent to hit two-and-a-half-month highs.
Article source: http://feeds.nytimes.com/click.phdo?i=281e4df6ca780f3c206309ede7c0ce96
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