NEW YORK — Stocks surged higher Thursday after another series of upbeat earnings reports and a reading on unemployment provided more evidence of an improving economy.
The Dow Jones industrials rose 122 points after the Labor Department said initial claims for unemployment benefits fell last week. And companies including Motorola, Time Warner Cable and Starwood Hotels & Resorts reported earnings that topped analysts’ forecasts.
It was the market’s second straight winning day after a plunge Tuesday that took the Dow down 213. Greece’s debt problems, one of the triggers for that slide, appeared less dire Wednesday and Thursday, and that allowed investors to focus on the growing signs of healing in the U.S.
Dealmaking and strong corporate earnings reports added to the growing optimism.
Hewlett-Packard Co. said late Wednesday it is buying smartphone maker Palm Inc. in an all-cash deal worth $1 billion.
Acquisitions are a sign that the economy is recovering and that companies are comfortable spending cash to build their businesses.
“Business are in a very strong position financially,” said Doug Lockwood, chief investment officer at Cornerstone Wealth Management in Auburn, Ind. Companies have built up big cash reserves that can go not only toward deals but also eventually to hire back workers, he said.
Today, the government will give its first assessment of overall economic activity during the first quarter when it states the gross domestic product. Analysts surveyed by Thomson Reuters forecast that the economy grew at an annual rate of 3.4 percent, down from 5.6 percent in the fourth quarter.
The Dow rose 122.05, or 1.1 percent, to 11,167.32, bringing its two-day advance to 175.33. The Standard & Poor’s 500 index rose 15.42, or 1.3 percent, to 1,206.78, while the Nasdaq composite index rose 40.19, or 1.6 percent, to 2,511.92.
