NEW YORK: Solid bank earnings bumped the US stock market higher on Thursday, boosted by news that fewer Americans made new claims for unemployment benefits than at any point in the last three years.
Wall Street equities were "buoyed by some upbeat US economic and earnings news," Charles Schwab analysts said.
The tone for trade was set early in the day with major banks reporting earnings.
"Better-than-expected earnings from investment bank and brokerage outfit Morgan Stanley has squeezed its shares higher to build on their prior session bounce," said analysts at Briefing.com.
"Even Bank of America is up sharply, despite disappointing bottom line results for the diversified bank and financial services giant."
Investment bank Morgan Stanley on Thursday reported a $4.2 billion profit for 2011, amid a late year loss that was not as bad as Wall Street feared. Its shares were up 5.4 percent.
Bank of America posted a $1.4 billion profit in 2011, wiping away a brutal loss the year before amid savage streamlining of the firm. Its shares were up 2.4 percent.
The Dow Jones Industrial Average was up 45.03 points (0.36 percent) to 12,623.98 at the closing bell.
The broad-based S&P 500 added 6.46 points (0.49 percent) to 1,314.50, while the tech-rich Nasdaq Composite advanced 18.62 points (0.67 percent) to 2,788.33.
Investors weighed a slew of US indicators that mainly pointed to an improving recovery from recession.
Weekly new claims for US unemployment benefits fell to their lowest level since April 2008, while the consumer price index was unchanged for the second straight month in December amid easing energy prices, Labor Department data showed.
Online auction and payments powerhouse eBay said after the market closed Wednesday that net profit more than tripled in the fourth quarter in part due to the sale of its remaining stake in Skype. Shares leaped 3.9 percent.
General Motors edged up 1.3 percent. The biggest US automaker looked poised to retake the crown in global auto sales after reporting a 7.6 percent jump in sales last year compared with 2010.
Earlier European stocks were lifted by successful government bond sales by France and Spain despite their ratings downgrade last week by Standard & Poor's.
Bond prices dropped. The yield on the 10-year Treasury rose to 1.97 percent from 1.90 percent Wednesday, while the 30-year increased to 3.04 percent from 2.95 percent.
Bond prices and yields move in opposite directions.
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