U.S. stocks gained, sending benchmark indexes to record highs, as earnings from financial institutions jumped. Revenues beat estimates and jobless claims fell amid testimony from Federal Reserve Chairman Ben S. Bernanke.
The Standard & Poor’s 500 Index gained 0.5% to 1,689.37 at 4 p.m. in New York. The index surpassed its previous daily high of 1,687.18 set on May 22. The Dow Jones Industrial Average added 78.02 points, or 0.5%, to 15,548.54, also a record. About 81% of stocks in the index traded above their average prices from the past 50 days as of yesterday, according to data compiled by Bloomberg.
“The underlying concept of what Bernanke is trying to accomplish is taking hold in the marketplace, and that’s a good thing,” Rick Fier, director of equity trading at Conifer Securities LLC in New York, said in an interview for Bloomberg. “The market gets the idea that a tapering is coming, the economy is improving and rates are still going to be low for a time. The initial jobless claims were better than expected. Earnings are coming in OK. All in all it’s hard not to be bullish on the market here.”
Stocks extended gains after a report showed a dramatic increase in the Philadelphia Fed’s general economic index increased to 19.8 in July from 12.5 the prior month. Readings greater than zero signal expansion in the area, which covers eastern Pennsylvania, southern New Jersey and Delaware.
“Jobless claims were a little bit better than expected which gives some comfort,” Richard Sichel, who works as chief investment officer at Philadelphia Trust Co., said by phone for Bloomberg. “And then you have earnings rolling full steam now so it becomes a stock-by-stock market.”
In corporate news, UnitedHealth surged $4.32, or 6.5%, to $70.55, after beating earnings estimates and affirming its revenue outlook for the year.
IBM soared $3.44, or 1.8%, to 197.99, after the technology company topped second-quarter earnings estimates and raised its full-year outlook late Wednesday.
Bank of America Corp., which yesterday reported earnings that beat estimates, gained 3.1 percent to 14.76.
Phone stocks dropped 0.9% as a group, for the biggest drop among 10 S&P 500 industries. Verizon Communications Inc. retreated 1.5% to $49.97. The second-largest U.S. phone company said the surge in demand for high-speed wireless Internet cut into profit margins and boosted the need for network investments.