Stocks surged Thursday to their highest levels in two months after banking giant Wells Fargo & Co. surprised the market with an early profit report that blew past analysts' expectations thanks to a strong increase in its lending business.
The Dow Jones industrial average jumped nearly 250 points and major market indexes logged their fifth straight week of gains. Markets are closed for Good Friday.
"The fact that Wells Fargo can have record profits despite the troubles facing the banking system tells you something," said Rick Campagna, chief investment officer at 300 North Capital in Pasadena, Calif. "It's very good news."
The Dow rose 246.27, or 3.1 percent, on Thursday to 8,083.38.
Broader stock indicators also put up big gains. The Standard & Poor's 500 index rose 31.40, or 3.8 percent, to 856.56. The Nasdaq composite index rose 61.88, or 3.9 percent, to 1,652.54.
In economic news, new jobless claims fell more than expected last week, but those continuing to receive unemployment benefits set another high. The total number of laid-off Americans receiving unemployment rose to 5.84 million from 5.75 million, the most on record since 1967 and more than analysts expected.
Still, analysts caution that some of Thursday's buying could have reflected traders jumping to cover misplaced bets that stocks, particularly banks, would fall. Traders who sell stocks "short" are forced to step in and buy to avoid further losses.
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