Investors also got some encouraging news on the U.S. economy Thursday.
A gauge of the economy's health rose in July, pointing to stronger growth in the second half of the year. The Conference Board's index of leading indicators increased 0.6 percent last month to a reading of 96. The index was unchanged in June and rose 0.2 percent in May.
The number of Americans applying for unemployment benefits rose last week but remains close to its lowest level in 5 Â½ years.
Applications for first-time benefits rose 13,000 to 336,000 in the week ending Aug. 17, the Labor Department said. That's up from 323,000 in the previous week, which was the lowest since Jan. 2008."The economy in general is showing signs of modest improvement," said Terry Sandven, chief equity strategist, at U.S. Bank wealth management. "Valuation is fair, sentiment is favorable and inflation is benign and that's a favorable backdrop for equities." The market rose despite some poor results from a pair of retailing companies. Sears dropped $3.55, or 8.2 percent, to $39.72 after the company said its second-quarter loss widened as the number of stores in operation declined and the company dealt with lingering effects from its spinoff of the Hometown and Outlet brand. Abercrombie & Fitch fell $8.27, or 18 percent, to $38.53 after the company said that declining traffic and weakness in girls' clothing pushed its net income down 33 percent in the second quarter. The yield on the 10-year Treasury note rose to 2.90 percent from 2.89 percent Wednesday. The yield is the highest it's been since July 2011, and is up sharply since going as low as 1.63 percent in early May. Rising bond yields have unsettled stock investors because they have a direct impact on the cost of borrowing for everyone, from home owners trying to refinance their mortgages to companies trying to sell debt, making them a potential long-term drag on the economy.