The Dow Jones industrial average spurted to another record Thursday, after companies reported profits that beat analysts’ estimates and claims for jobless benefits fell for a second straight week.
The data suggested the U.S. economy won’t cool as quickly as some investors feared.
“As far as I can tell, consumers keep spending as long as unemployment is low,” said Ed Peters, chief investment officer at PanAgora Asset Management Inc.
The Dow average climbed 99.26, or 0.8 percent, to 12,416.76, surpassing its previous high of 12,342.56 set on Nov. 17. The Standard & Poor’s 500 index added 12.28, or 0.9 percent, to 1425.49, a six-year high. The Nasdaq composite index jumped 21.44, or 0.9 percent, to 2453.85.
Advanced Micro Devices Inc., the world’s second-biggest maker of computer processors, had its steepest gain in two years after raising its earnings forecast. Bear Stearns Cos. climbed to an all-time high after the investment bank reported record net income. And Costco Wholesale Corp., the nation’s largest warehouse club, led retailers higher as results bettered forecasts.
Analysts said the rise in profits shows that companies are withstanding a slowdown in manufacturing and housing.
“Corporate earnings are continuing to be strong,” said Patrick Becker, who helps manage $2.3 billion as chief investment officer at Becker Capital Management in Portland, Ore. “The slowdown isn’t here in any major way. That’s part of the reason we’re seeing moves up.”
Profits at S&P 500 companies have climbed more than 10 percent for 13 quarters in a row, according to Thomson Financial.
The earnings gain has helped give the S&P 500 a 6.7 percent boost this quarter.
