* Morgan Stanley's stock soars after strong results
* Shares of eBay, Intel fall after disappointing forecasts
* Bernanke soothes markets again in congressional testimony
* Dow up 0.5 pct, S&P 500 up 0.5 pct, Nasdaq up 0.04 pct
By Caroline Valetkevitch
NEW YORK, July 18 The Dow and the S&P 500 closed
at record highs on Thursday after Morgan Stanley and others
reported better-than-expected earnings and Federal Reserve
Chairman Ben Bernanke's comments further reassured markets.
Shares of Morgan Stanley jumped 4.4 percent to
$27.70, its highest close since April 2011, after the bank
posted a 42 percent increase in quarterly profit as stock
trading revenue soared. Earlier, Morgan Stanley's stock hit a
session high of $27.95, its highest intraday level since April
2011. The S&P financial index climbed 1.3 percent.
Of the 21 financial companies that have reported quarterly
earnings so far, 76 percent have surpassed analysts' estimates,
Thomson Reuters data showed.
UnitedHealth shares rallied, bolstering the Dow and
other health insurers' stocks. UnitedHealth gained 6.5 percent
to $70.55 after the company's results beat expectations, while
the Morgan Stanley healthcare payor index rose 3.1
Both the Dow and the S&P 500 also hit all-time intraday
highs shortly after the opening bell. The Dow climbed as high as
15,589.40, while the S&P 500 touched a session high of 1,693.12.
Bernanke, speaking before the Senate Banking Committee,
reiterated comments he made on Wednesday to the House Financial
Services Committee. He stressed that the timeline for winding
down the Fed's stimulus program was not set in stone.
"We got no negative surprises from the Fed chairman today,
so the market liked that," said Bucky Hellwig, senior vice
president of BB&T Wealth Management in Birmingham, Alabama.
The Dow Jones industrial average rose 78.02 points,
or 0.50 percent, to 15,548.54, a record closing high. The
Standard & Poor's 500 Index advanced 8.46 points, or 0.50
percent, to a record close of 1,689.37. The Nasdaq Composite
Index gained just 1.28 points, or 0.04 percent, to end
The benchmark S&P 500 is up 18.5 percent for the year.
Analysts' estimates for corporate earnings have been lowered
so much that investors believe the low targets should be easily
exceeded. Instead, investors will likely hone in on revenue
figures and outlooks.
"Earnings have been pretty much coming in, in line with
expectations," Hellwig said.
IBM raised its full-year outlook and reported
earnings that beat estimates, though the company's revenue
missed forecasts. Shares of International Business Machines
rose 1.8 percent to $197.99. IBM gave one of the biggest lifts
to the S&P 500 and helped offset the impact of slides in Intel
Intel, which also curbed the Nasdaq's gain, slid 3.8 percent
to $23.24 after the world's biggest chipmaker cut its full-year
revenue forecast. Shares of eBay fell 6.7 percent to $53.52
after the e-commerce company said full-year results would be at
the low end of its forecast range.
Analysts expect S&P 500 companies' second-quarter earnings
to have grown 3.5 percent from a year earlier, with revenue up
1.1 percent, according to Thomson Reuters data. So far, 70.4
percent of all companies that have reported results have
surpassed analysts' earnings expectations, while 49.4 percent
have topped revenue views.
A meeting of Dell shareholders to vote on founder
Michael Dell's $24.4 billion offer to take the company private
was adjourned to next week. Dell's stock rose 1.9 percent to
After the bell shares of Google fell 4.9 percent to
$865.73 following the release of its results. Google ended the
regular session down 0.9 percent at $910.68.