Stocks jump on upbeat earnings reports

NEW YORK -- Upbeat corporate earnings gave stocks another burst of energy Thursday.

Stocks surged as stronger-than-expected profit reports and a surprise drop in the number of people continuing to seek unemployment benefits handed investors the latest evidence that the economy could be strengthening.

Earnings reports have driven a July rally and on Thursday gave investors new reasons to be optimistic about the prognosis for a recovery.

At the close of trading, the Dow Jones industrial average was up 83.74, or 0.9%, to 9,154.46. The Standard & Poor's 500 index rose 11.60, or 1.2%, to 986.75. The Nasdaq advanced 16.54, or 0.8%, to 1,984.30. It rose to nearly 2,010 in morning trading, its first move above 2,000 since Oct. 3. The index is up more than 55% from its low of 1,269 in March.

General Electric led the Dow higher after a Goldman Sachs analyst raised his rating on the stock and predicted the industrial conglomerate won't have to split off its lending arm under financial industry reform proposals circulating in Congress.

"There are some specific stock stories that are getting people involved and making people confident," said Nick Kalivas, vice president of financial research at MF Global in Chicago.

Investors also welcomed a report that the number of Americans continuing to collect unemployment benefits fell unexpectedly last week to 6.2 million. Economists polled by Thomson Reuters had expected that figure to rise to 6.3 million from 6.23 million in the prior week.

Analysts said the end of the month is pressuring money managers and traders to show they have participated in July's steep rally. Often, the summer months are quieter than the rest of the year on Wall Street as traders take vacations. But the Dow is on track for its best July in 20 years.