Updated from 4:16 p.m. EDT
A series of solid earnings reports supported a rebound in the U.S. market Thursday, and both the
Dow Jones Industrial Average
closed at record highs.
The Dow finished above 14,000 for the first time ever, rising 82.19 points, or 0.59%, to 14,000.41. The
was up 6.91 points, or 0.45%, at 1553.08, and the
was ahead by 20.55 points, or 0.76%, to 2720.04, its best level in more than six years.
Art Hogan, chief market analyst with Jefferies, said that finishing above 14,000 on the Dow is "not necessarily a breakthrough in technical terms, although it's an important psychological one.
"Now we'll have to see if we can hold on to these gains to end the week," he continued. "The important thing about passing this milestone is that it reminds us that we've had a really good year. It also serves as a great reminder that perhaps it's time for investors to reassess their positions."
About 3.26 billion shares changed hands on the
New York Stock Exchange
, as advancers beat decliners by a 5-to-3 margin. Volume on the Nasdaq reached 2.24 billion shares, with winners outpacing losers 3 to 2.
The major indices fell to session lows after the 2 p.m. EDT release of the minutes from the
Federal Open Market Committee's
June meeting before rebounding.
At that gathering, policymakers left the fed funds target rate -- the rate banks use to charge each other interest for overnight loans -- unchanged at 5.25% for the eighth consecutive meeting.
In the statement accompanying the rate decision, the central bank said it would remain on guard against inflation, but it expressed some worry that the housing market downturn would persist for longer than previously expected.
The minutes indicated that members of the FOMC judged that the risks to economic growth were more balanced than at the May meeting, although some members pointed to "rising mortgage delinquency rates and related difficulties in the subprime mortgage market as factors that could crimp the availability of mortgage credit and the demand for housing."
The panel also reiterated its inflation concerns, saying "consumer prices were viewed as favorable, but were not seen as convincing evidence that the recent moderation of core inflation would be sustained."
The release came after Fed Chairman Ben Bernanke appeared for his second day of congressional testimony, this time before a Senate panel on Capitol Hill.
A day ago, he touched upon the detrimental effects of the subprime slump. He also repeated his case that inflation remains the biggest potential trouble spot for the U.S. economy, and that the upside risk keeps the Fed's core personal consumption expenditure forecast for the fourth quarter at 2% to 2.25%.
Following the second round of his testimony, Treasury prices were little changed. The 10-year note was static in price, yielding 5.03%, and the 30-year bond was higher by 4/32, yielding 5.11%.
On Wednesday, the major indices ended lower, but a rally near the close kept the selloff from being much worse. The Dow had been down more than 140 points before cutting into the losses and finishing off 53.33 points, or 0.38%, to 13,918.22.
Similarly, the S&P and the Nasdaq went out well ahead of their weakest points of the day.
Helping draw in the bulls was the latest crush of earnings. After the prior close,
topped estimates and guided its profits higher for the full year, and
, a Dow component, was also better than expected.
However, concerns about online operations hampered eBay's stock, which lost 1.6% to $33.50. IBM, on the other hand, advanced 4.3% to $115.86.
Another winner was
, which saw its shares climb after the networker raised its sales forecast. Juniper jumped $3.25, or 12.2%, to $29.98.
Following the most recent close, even more tech giants were posting numbers, including
Advanced Micro Devices
Dozens more companies posted their results before the open. German business software giant
said second-quarter revenue and operating income jumped 10%, and Dow stock
easily beat the Thomson First Call consensus.
Bank of America
Bank of New York
all exceeded targets, as did
was in line with expectations, but offered sluggish guidance, and
was one of the few notables missing their estimated quarterly results. Hershey fell 3% to $48.45, and PNC Bank slipped 2.5% to $71.37.
A raft of economic data also influenced trading. The Labor Department said that initial jobless claims fell by 8,000 last week to 301,000 claims. The less-volatile four-week moving average decreased by 6,250 to 312,000.
Other economic releases were slightly disappointing. The Conference Board said its leading economic indicators for June fell an unexpected 0.3%. Also, the Philadelphia Federal Reserve said its July mid-Atlantic manufacturing survey fell to 9.2 from 18.0 in June, well below consensus.
Meanwhile, traders ignored crude prices that remained stubbornly strong. The front-month August contract rose 87 cents to finish at $75.92 a barrel and is now roughly $2.50 from its all-time intraday high. Gasoline prices were unchanged at $2.19 a gallon.
"Investors are willing to tolerate higher rates and higher oil prices if the cause is expanding economic growth," said Marc Pado, U.S. market strategist with Cantor Fitzgerald. "They are a little less happy if we have to deal with these issues and face an economy still languishing below trend."
Among analyst actions, Bank of America had a broad call on the energy sector, initiating coverage of a number of names.
all received buy ratings. Each stock gained 1.7% of more.
Getting neutrals were
Basic Energy Services
. All three finished higher by at least 1.3%.
At the same time, Bernstein downgraded the U.S. refining industry to underperform and cut its ratings on
. Sunoco fell $2.03, or 2.5%, to $77.82. Valero slid $1.41, or 1.9%, to $74.52.
Overseas, stocks were uniformly higher. Tokyo's Nikkei rose 0.8%, and Hong Kong's Hang Seng gained 0.8%. London's FTSE was up 1.1%, and Frankfurt's DAX added 1.2%.
The economic docket is empty Friday, and the earnings torrent looks to be more manageable. Among those due to report are