NEW YORK -- After a quiet start, major U.S. stock indexes again set all-time highs Thursday afternoon as the market built on Wednesday's surge. Banks continued to lead the way as bond yields jumped, and small-company stocks soared again.
Bond yields in the U.S. and Europe, particularly in heavily indebted countries, jumped after the European Central Bank surprised investors by saying it will reduce the size of its monthly bond purchases. That sent interest rates higher, which makes it more profitable for banks to lend money.
Energy companies rose with the price of oil and companies that make chemicals and other basic materials also climbed. Industrial companies and makers of household goods slipped, which held stocks back from even larger gains.
"Bond yields are creeping higher as these central banks are easing off the pedal a bit," said John Canally, an investment strategist for LPL Financial.
The Dow Jones industrial average climbed 65.19 points, or 0.3 percent, to 19,614.81. It rose as much as 115 points around 2 p.m. The Standard & Poor's 500 index picked up 4.84 points, or 0.2 percent, to 2,246.19.
The Nasdaq composite had lagged behind the other major indexes over the last two weeks, but it rebounded along with technology companies and rose 23.59 points, or 0.4 percent, to 5,417.36.
The Russell 2000 index of small-company stocks jumped 21.87 points, or 1.6 percent, to 1,386.37.
The European Central Bank extended its bond-buying economic stimulus program, as investors expected. It will spend about $579 billion through the end of 2017. But starting in March it will begin spending less on bonds.
While the bank said it's not getting ready to phase out its stimulus program, Canally, of LPL Financial, said investors are starting to think about the time when the central bank will gradually stop buying bonds and will start raising interest rates in response to a healthier economy.
U.S. government bond prices fell. The yield on the 10-year Treasury note rose to 2.41 percent from 2.34 percent. That drove banks stocks up since higher interest rates will allow banks to charge more for lending money. Goldman Sachs, which has surged 33 percent since the presidential election and is trading near its all-time high, rose $5.89, or 2.5 percent, to $241.45 and Bank of America picked up 38 cents, or 1.7 percent, to $22.95.
Specialty chemicals maker DuPont helped lead materials companies higher as it added 86 cents, or 1.2 percent, to $74.68. Competitor Albemarle gained $3, or 3.4 percent, to $91.80.
Benchmark U.S. crude rose $1.07, or 2.1 percent, to $50.84 per barrel in New York. Brent crude, the international standard, added 89 cents, or 1.7 percent, to $53.89 a barrel in London.
Athletic apparel maker Lululemon raised its annual profit forecast after its third-quarter results came in above Wall Street projections. Its stock jumped $9, or 15 percent, to $68.84.
Gold lost $5.10 to $1,172.40 an ounce. Silver fell 18 cents to $17.10 an ounce. Copper slid 2 cents to $2.63 a pound.
Business on 12/09/2016