Wall Street rises on bank results, but Google sinks late
NEW YORK (Reuters) - Stocks rose for the third straight day on Thursday, sparked by results from Bank of America and Morgan Stanley and as the latest jobless claims dropped to a near four-year low.
The S&P 500 hit a fresh five-month high, with the industrials, consumer discretionary stocks and financials leading gains.
Tech shares advanced ahead of earnings from a number of bellwethers expected after the close.
But reports after the bell were mixed. Google (GOOG.O) fell short of Wall Street's lofty expectations, and its shares dropped 10 percent to $575.50.
"Google was the big disappointment because so much of their emphasis is developing products, specifically Android, where more dollars are going out than they anticipated," said Kim Forrest, senior equity research analyst at Fort Pitt Capital Group in Pittsburgh.
In the regular session, Bank of America Corp (BAC.N) climbed 2.4 percent to $6.96 after it reported it swung to a fourth-quarter profit from a year-ago loss. Morgan Stanley (MS.N) reported a loss that was narrower than expected, sparking a 5.4 percent jump in its stock to $18.28.
"We think (financials) have pretty much bottomed here in the U.S.," said Paul Simon, chief investment officer at Tactical Allocation Group in Birmingham, Michigan.
"They represent some compelling value. We think a lot of the bad news has been discounted, and you've seen stock prices rallying in the beginning of the year," said Simon, whose firm has been buying financials.
Financial shares have rallied since the start of the year. The S&P financial index .GSPF is up 8.1 percent so far for 2012, helping to push the S&P 500 up 4.5 percent for the year.
In the latest snapshot of the U.S. economy, data showed the number of Americans filing for new jobless benefits dropped to nearly a four-year low last week. It added to views that the economy is slowly moving forward.
The Dow Jones industrial average .DJI rose 45.03 points, or 0.36 percent, to end at 12,623.98. The Standard & Poor's 500 Index .SPX gained 6.46 points, or 0.49 percent, to 1,314.50. The Nasdaq Composite Index .IXIC climbed 18.62 points, or 0.67 percent, to close at 2,788.33.
Semiconductor stocks also advanced, with the PHLX SOX Index .SOX rising 1.9 percent. Xilinx Inc (XLNX.O) shot up 1 percent to $35.64 a day after issuing an upbeat forecast.
IBM UP LATE, AMEX SLIPS
Among other major tech companies reporting after the close, IBM (IBM.N) said it sees 10 percent earnings growth in 2012, and its shares rose 2.5 percent to $184.94.
Shares of Microsoft (MSFT.O) gained 1.9 percent to $28.64 in extended trading, and shares of Intel (INTC.O) added 0.5 percent to $25.75, both after reporting results.
American Express (AXP.N) also posted results after the bell, and its shares slid 1.9 percent in extended trading to $49.98.
In a sign of optimism about Europe, both Spain and France drew strong demand at government debt auctions.
With the S&P 500 having broken above the 1,300 level, it looks set to hit the 1,360-1,370 area, said Bruce Zaro, chief technical strategist at Delta Global Asset Management in Boston.
"That (area) represents the May 2011 high ... and I believe we will see that during this earnings season," Zaro said.
The Dow Jones Transportation Average .DJT gained 1.6 percent, with shares of Union Pacific Corp (UNP.N) rising 2.2 percent to $112.18 after reporting quarterly profit and revenue that beat estimates.
Volume totaled about 7.6 billion shares traded on the New York Stock Exchange, NYSE Amex and Nasdaq, above the daily average of 6.68 billion, and the highest since December 16.
Advancing stocks outnumbered declining ones by a ratio of about 2 to 1 on the New York Stock Exchange. On the Nasdaq, nearly three stocks rose for every two that fell.
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