Updated from 4:10 p.m. EDT
Stocks used a late rally to close with gains Thursday, even though oil prices reached another record high and pressured the major averages earlier in the session.
Dow Jones Industrial Average
rose 91.48 points, or 0.86%, to 10,685.89, while the
was up 8.88 points, or 0.71%, to 1237.81. The
gained 16.74 points, or 0.78%, to 2174.55.
All three major indices were hovering around the flatline before oil closed Thursday. But once it did, stocks started their ascent.
"Oil prices in the morning would've been the biggest story, but by the close the market's incredible resilience is what investors are left with," said Michael Sheldon, chief market strategist with Spencer Clarke LLC. "It's a contrast to how the markets ended yesterday. I think so far higher oil prices have not had a major impact. There are a lot of positives driving the consumer and the stock market."
About 1.47 billion shares changed hands on the
New York Stock Exchange
, with advancers beating decliners 11 to 5. Trading volume on Nasdaq was 1.58 billion shares, with advancers outpacing decliners 3 to 2.
"Everything continues to revolve around oil after we got licked pretty good yesterday," said Larry Wachtel, senior market analyst with Wachovia Securities. "Everything is a knee-jerk reaction now."
Crude futures breached the $66 a barrel level, and in Nymex floor trading, the September contract closed up 90 cents to $65.80 a barrel. Traders pointed to a report from the private International Energy Agency, which said global demand growth has been little affected by spiking energy prices this year.
"Is oil going to streak up to $70 and then pull back?" asked Dave Briggs, head of equity trading with Federated. "It's the same old concerns. Sooner or later it's going to start affecting the economy. Hopefully we'll get a seasonal correction that will help equities."
The Dow's best gainer was
, which was upgraded by UBS to buy from neutral, as the firm raised its aluminum industry forecast. Alcoa rose 90 cents, or 3.1%, to $29.77.
Meanwhile, after the bell Thursday
reported a second-quarter profit of $1.02 billion, or 41 cents a share, up from $799 million, or 31 cents a share, a year ago. Excluding items, Dell earned 38 cents a share, matching the Thomson First Call consensus. Revenue rose to $13.43 billion from $11.7 billion, but fell short of the $13.7 billion estimate. Dell finished down 15 cents, or 0.4%, to $39.58 before the earnings release.
Elsewhere, the 10-year Treasury note was up 16/32 in price to yield 4.33%, while the yen and euro continued to rise against the dollar.
On the economic front, the Labor Department said jobless claims fell by 6,000 to 308,000 for the week ended Aug. 6. Economists had expected 1,000 more claims from the prior week.
Also, the Commerce Department said retail sales for July rose 1.8%. Excluding automobiles, sales rose 0.3%. Economists were forecasting a 2.2% rise in total retail sales, and for sales excluding autos to increase by 0.6%.
The Commerce Department also said that total business inventories were unchanged in June. Economists anticipated a 0.1% increase after a 0.1% rise in May.
Stronger sectors Thursday included energy, technology, health care and utilities. Airlines were among weaker performing areas.
In corporate news Thursday,
confirmed that it will pay $1 billion for 40% of the Chinese Internet company Alibaba.com. It will also throw in its Chinese search operations for the stake. Yahoo! gained 75 cents, or 2.2%, to $34.94.
posted second-quarter earnings from continuing operations of $540 million, or 61 cents a share, up from $360 million, or 39 cents a share, a year ago. Revenue rose 13.6% to $11.99 billion. Same-store sales increased 6.7%. Analysts polled by Thomson First Call expected EPS of 59 cents a share. Target rose 11 cents, or 0.2%, to $55.65.
posted strong fourth quarter Wednesday, saying profit rose 67% from a year ago to $716 million, or 22 cents a share. Revenue jumped 12% to $6.1 billion. Shares were higher by 59 cents, or 3.4%, to close at $18.03.
posted second-quarter earnings of $30.6 million, or 36 cents a share. Analysts were expecting 36 cents a share. Net sales rose 34% to $253.4 million as same-store sales rose 10% from a year earlier. The stock rose 71 cents, or 1.2%, to $57.79.
raised its offer to purchase rival
for a third time to $1.79 billion, or $21 a share, a $1-a-share increase from its last bid. Whirlpool lost 83 cents, or 1%, to $80.70, while Maytag was down 21 cents, or 1.1%, to finish at $18.79.
finished 6.2% lower after news that
will stop marketing TiVo's digital video recorders. DirecTV, TiVo's largest customer, will start using technology it has created with News Corp. TiVo lost 37 cents to $5.62, while DirecTV slipped a penny, or 0.06%, to $16.18.
, whose shares were downgraded by Goldman Sachs on Thursday, fell 0.2%. The brokerage said Intel's margins are peaking, and that often means the stock is too.
A.G. Edwards raised
to buy from hold and set a $92 price target, about $10 above the current price. The brokerage touted Oxy's production growth and exploration portfolio. Occidental added $1.52, or 1.9%, at $83.65.
J.P. Morgan downgraded
to neutral from overweight, citing the slow pace of improvement in the chemical mechanical planarization business. Novellus gained 21 cents, or 0.8%, to $27.34.
Deutsche Bank upgraded
to buy from hold while raising its stock price target to $66 from $57. The firm now believes the retailer has the correct fashion chemistry in its stores. Kohl's will release second-quarter earnings results after the bell. Shares lost 15 cents, or 0.3%, to $54.75.
Overseas markets were mixed, with London's FTSE 100 down 0.4% to 5358 and Germany's Xetra DAX losing 0.7% to 4954. Stocks continued to rally in Asia, with Japan's Nikkei rising 1.4% overnight to 12,263, while Hong Kong's Hang Seng added 0.6% to 15,445.
To view Gregg Greenberg's video take on today's market, click here