Stocks continue surge with earnings season in full swing

NEW YORK -- Investors pushed Wall Street's rally forward Thursday, just at a slower pace.

Stocks continued the week's rally-and-pause play, closing higher after surging the day before on a strong profit report from chipmaker Intel.

Stocks took flight after zigzagging the first half of the day. Analysts said the market's smaller moves were to be expected after the Dow Jones industrial average surged 470 points, or 5.9%, in only three days.

The Dow was advanced 95.61, or 1.11%, to 8,711.82. In the broad market, the Standard & Poor's 500 index rose 8.06, or 0.86%, to 940.74, and the Nasdaq composite index rose 22.13, or 1.19%, to 1,885.03.

Technology stocks advanced ahead of profit reports from Google goog and computer maker IBM ibm. They reported results after the market close. Investors were eager to hear their assessments of where the economy is headed.

Financial stocks fell after small-business lender CIT Group cit said negotiations with federal regulators about a rescue broke off. Investors are worried the company could file for bankruptcy protection. CIT's shares tumbled about 75%, and also weighed on other financial shares.

Investors looked past a stronger profit report from JPMorgan Chase jpm, which reported big gains in its investment banking business, held back somewhat by loan losses.

"A lot of the good news has been priced in and the market really needs to see more evidence that there is strong momentum in the financials," said Nick Kalivas, vice president of financial research at MF Global.

The jump in stocks this week reversed a month-long slide that came as investors worried that a huge rally in March and April on hopes for an economic recovery had gone too far. This week's earnings reports have given investors some of the confirmation that the economy isn't as bad as feared, but they still want to see more evidence of a turnaround.

Meanwhile, bond prices jumped. The yield on the benchmark 10-year Treasury note, which moves opposite its price, fell to 3.53% from 3.62% late Wednesday.

The Labor Department said new claims for unemployment insurance plunged last week by 47,000 to 522,000, the lowest level since early January. Economists polled by Thomson Reuters predicted an increase to 575,000.

The improved data, however, may have been affected by the timing of automobile plant shutdowns. Eric Thorne, an investment adviser at Bryn Mawr Trust said the figures were "skewed."

JPMorgan said Thursday it generated record revenue, spurred on by strong investment banking operations. Its results come two days after Goldman Sachs gs also topped expectations with much stronger results in underwriting and trading.

Strong earnings from the banks have encouraged investors about the economy. The results also show that many of the nation's biggest banks have quickly recovered from the collapse of credit markets last fall that led to the failure of Lehman Brothers and near collapse of American International Group Inc.

In other trading, the dollar fell against other currencies. Gold prices fell.

Light, sweet crude rose 48 cents to $62.02 a barrel on the New York Mercantile Exchange.

Overseas, Britain's FTSE 100 rose 0.4%, Germany's DAX index rose 0.6%, and France's CAC-40 gained 0.9%. Japan's Nikkei stock average rose 0.8%.