Dow, S&P 500 end at highs after data, stimulus in place

Stocks were broadly higher, with all 10 S&P 500 sectors in the black

The Dow and S&P 500 hit record closing highs on Thursday, with the S&P 500 topping 1,700 after strong data on factory growth and as major central banks said they would keep monetary stimulus in place.

Stocks were broadly higher, with all 10 S&P 500 sectors in the black. Growth-sensitive financials, industrials and consumer discretionary shares registered the biggest gains. The Dow transportation average rose 3.2%, also at a new closing high.

Google shares, up 1.9% at $904.22, and Apple , up 0.9% at $456.67, were among companies giving the biggest boost to the S&P 500, along with financials. JPMorgan Chase shares gained 1.5% to $56.54 while Bank of America was up 2.4% at $14.95.

 

Data on weekly US initial jobless claims and national manufacturing came in better than expected. The Institute for Supply Management index of national factory activity for July rose to its highest level since June 2011.

"The talk we've been hearing that the second half is going to be better than the first, we saw some follow-through on that. The ISM showing expansion in a lot of different areas is one of the main reasons why Wall Street (was) rallying today," said Brian Amidei, managing director at HighTower Advisors in Palm Desert, California.

Global central banks maintained accommodative stances on Thursday, with European Central Bank President Mario Draghi reiterating that the ECB's rates will remain at their present level or lower for an "extended period.

On Wednesday, the Federal Reserve, in its latest policy statement, gave no hint that a reduction in the pace of its bond-buying program was imminent, as the economy continues to recover but is still in need of support.

The Dow Jones industrial average was up 128.48 points, or 0.83%, at 15,628.02, a record close. It hit a new intraday high of 15,650.69. The Standard & Poor's 500 Index was up 21.14 points, or 1.25%, at 1,706.87, also a record. The benchmark S&P surpassed 1,700 early in the session after failing to break above that level on Wednesday.

The Nasdaq Composite Index was up 49.37 points, or 1.36%, at 3,675.74. The index hit a 13-year high.

The drop in initial jobless claims, coupled with Wednesday's better-than-expected ADP report on private-sector hiring , bodes well for the July payrolls data on Friday.

Yelp Inc surged 23.2% to $51.50 after the consumer reviews website posted a smaller-than-expected quarterly loss and forecast third-quarter revenue above analysts' expectations.

Pioneer Natural Resources was the S&P 500's biggest percentage gainer after reporting second-quarter results. The company's shares closed up 12.5% to $174.15, after hitting an all-time high of $180.99 earlier.

On the downside, Exxon Mobil Corp dipped 1.1% to $92.73, the biggest drag on the Dow and the S&P 500, after reporting a sharp drop in quarterly profit on lower oil and gas output production and weaker earnings from its refining business.

Data from Thomson Reuters' Lipper service showed investors in funds based in the United States pulled money out of taxable bond funds for the first week in three while stock funds marked a fifth straight week of inflows.

Some market participants have suggested that there has been a pickup in money moving out of bond fund and bond exchange-traded funds and into small- and mid-cap funds and ETFs. But analysts said the movement has been slow.

"I think we're in the very early innings of that occurring," said Eric Marshall, director of research at Hodges Capital Management, Dallas, Texas.

After the bell, shares of LinkedIn rose 6.3% to $226.51 after it reported a big jump in quarterly revenue. Also after the close, shares of Weight Watchers dropped 15.5% to $39.75 following the release of its results and outlook.

Volume was roughly 6.89 billion shares traded on the New York Stock Exchange, the Nasdaq and the NYSE MKT, above the average daily closing volume of about 6.4 billion this year.

Advancers beat decliners on the NYSE by about 1.6 to 1 and on the Nasdaq by about 2.6 to 1.