The latest reports struck on a theme that has played out for weeks: Times are tough but companies aren't doing as badly as had been feared. Many have chopped costs to produce profits well beyond the market's modest expectations.
A surprise drop in the number of people continuing to seek unemployment benefits gave investors even more reason to put money into stocks. But President Obama said late in the day that second quarter GDP figures due out Friday would indicate a contraction and that job losses remained a "huge" problem, taking some steam out of the day's rally.
Stock market gains were nearly halved in the final hour of trading Thursday, but it was still a decent day at the office. It's the power of people getting off the fence, said one market observer as the major indices rose to levels not seen in months earlier in the session.
The Dow Jones Industrial Average rose 83.74 points, or 0.9%, to 9154.46, and the S&P 500 tacked on 11.6 points, or 1.2%, to 986.75. The Nasdaq Composite gained 16.54 points, or 0.8%, to 1984.3.
"When it's a pullback, we say it's gone too far too fast, and when it's a rally, we say it's a buying opportunity. But the truth is there are so many skeptics on the sideline, and with each passing day, those skeptics give up, throw in the towel and come into the market," says Hugh Johnson, CIO of Illington Johnson Advisers. "It's just the force of fence-sitters in the early stages of a bull market."
"The truth is that the trend is encouraging," says Johnson. "It's very consistent with everything you hear or see, which is that the recession is getting less worse and employment conditions are getting less worse. It's consistent with this view that we're in a cyclical bull market that will be accompanied by a cyclical recovery in the economy."
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