By Leah Schnurr
NEW YORK - The Dow and S&P 500 scaled fresh heights on Thursday, boosted by better than expected results from Morgan Stanley and United Health, while investors looked to a second day of congressional testimony by Federal Reserve Chairman Ben Bernanke.
Shares of Morgan Stanley (MS) surged 4.1 percent to $27.64 after the bank reported stronger-than-expected adjusted quarterly profit as revenue grew in all its major businesses.
A jump in shares of UnitedHealth (UNH) helped boost the Dow and other health insurers. UnitedHealth was up 5.7 percent at $70.03 after the company's results beat expectations, while the S&P health sector gained 0.4 percent.
Analysts' estimates for company earnings have been lowered so much that investors believe the low targets should be easily exceeded. Instead, investors will likely zero in on revenue figures and outlooks.
"Expectations on earnings have been driven down so much that they're pretty easy hurdles to surpass and most companies have done that," said Alan Lancz, president at Alan B. Lancz & Associates Inc in Toledo, Ohio.
Under that scenario, the path of least resistance for the stock market is higher, said Lancz.
IBM raised its full-year outlook and reported earnings that beat estimates, though the company missed on revenue. Shares of International Business Machines (IBM) rose 2.1 percent to $198.52.
Analysts expect S&P 500 companies' second-quarter earnings to have grown 3.3 percent from a year earlier, with revenue up 1.2 percent, according to Thomson Reuters data.
The Dow Jones industrial average rose 77.78 points or 0.5 percent, to 15,548.3, the S&P 500 gained 8.07 points or 0.48 percent, to 1,688.98 and the Nasdaq Composite added 6.27 points or 0.17 percent, to 3,616.27.
Both the Dow and S&P hit new intraday highs shortly after the opening bell.
But gains on the Nasdaq were capped as shares of eBay slumped 6.7 percent to $53.52 after the company said full-year results would be at the low end of its forecast range, while Intel tumbled 2.9 percent to $23.45 after it cut its full-year revenue forecast.
A meeting of Dell (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 2.2 percent to $13.17.
With the benchmark S&P up nearly 18 percent for the year, investors are alert to any signs of how soon the Federal Reserve will start to wind down the pace of its $85-billion monthly bond purchases, a key driver of the equity market rally this year.
Speaking before Congress on Wednesday, Bernanke stressed the timeline for winding down the Fed's stimulus program was not set in stone. His remarks helped Wall Street end modestly higher.
The Fed chairman will appear for a second day of testimony before the Senate Banking Committee at 10:30 am EDT (1430 GMT).
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