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NEW YORK (CNN/Money) -
The Nasdaq and S&P 500 hit fresh four-year highs Thursday as investors welcomed the latest strong batch of earnings reports.
As of 5:45 p.m. ET, Nasdaq and S&P futures pointed to a flat open for stocks, when fair value is taken into account.
The Dow Jones industrial average (up 68.46 to 10,705.55, Charts) added more than 0.6 percent, closing at a four-month high.
The Standard & Poor's 500 (up 6.93 to 1,243.72, Charts) index and the Nasdaq composite (up 12.22 to 2,198.44, Charts) both added nearly 0.6 percent, both closing at their highest levels since June 2001.
Friday brings a couple of relevant economic reports, including the first read on gross domestic product growth in the second quarter.
GDP is expected to grow at a 3.5 percent annualized rate, down from a 3.8 percent annualized rate in the second quarter.
There's been talk that the GDP number may fall a bit shy of forecasts, due to some inventory issues, said John Forelli, portfolio manager at Independence Investments. However, any softness is likely already factored into the market and isn't likely to upset stocks much, he added.
"The market has been reacting positively to the earnings news, and we think this uptrend should continue," he added.
Other reports due Friday include the revised read on consumer sentiment in July from the University of Michigan and the July Chicago PMI, a regional read on manufacturing.
Thursday's market
Aetna, Bristol-Myers, Newell Rubbermaid and Starbucks were among the companies to report upbeat earnings between Wednesday evening and Thursday morning.
The strength of these and other reports served to further solidify perceptions that earnings are stronger than expected and therefore may justify lofty stock valuations.
"Generally, earnings are better than expected and I think the stock market is receptive to that," said Tom Schrader, managing director of U.S. equity trading at Legg Mason.
With close to 70 percent of the S&P 500 having already reported results, growth in the second quarter is now expected to top 10 percent versus a year ago, according to Reuters. That would mean an extension of the three-year streak of double-digit earnings growth -- something that had been in question at the end of the quarter.
There are other supportive factors too, Schrader said, citing recent strong economic news, the market's ability to ignore oil prices lately, and the fact that the direction from the Fed is unlikely to change soon.
However, after four straight weeks of gains, the temptation may be there for investors to either take profits or tread water.
"The danger is that we're getting a little overextended," Schrader added.
What moved?
Gains covered a number of sectors, with 25 out of 30 Dow issues closing higher on the session.
Among the movers, component Honeywell (up $0.97 to $38.99, Research) popped 2.6 percent on an upgrade from Merrill Lynch and Caterpillar gained 3 percent along with the broader materials sector.
Aetna (up $3.78 to $78.40, Research) reported higher quarterly earnings that met estimates on higher premiums and increased membership. The health insurer's stock climbed about 5 percent.
The drugmaker Bristol-Myers Squibb (up $0.07 to $25.17, Research) also reported higher earnings that handily beat Wall Street forecasts. However, shares were little changed.
Consumer products maker Newell Rubbermaid (up $1.90 to $25.21, Research) reported higher-than-expected earnings that rose from a year ago, due to cost-cutting and higher selling prices.
Starbucks (up $2.33 to $52.68, Research) reported earnings late Wednesday of 31 cents a share, up from 24 cents a year earlier and a penny more than expected, sending shares higher.
On the downside, a few oil companies reported weaker than expected earnings.
Exxon Mobil (up $0.40 to $60.00, Research) reported earnings of $1.23 per share, up from 88 cents a year earlier but a penny less than expected.
Apache (down $0.55 to $69.94, Research) also reported earnings that jumped from a year ago, but missed forecasts.
DaimlerChrysler (up $4.29 to $48.26, Research) rose after saying that its embattled CEO was stepping down at the end of the year. The automaker also reported higher-than-expected quarterly profit.
Market breadth was positive. On the New York Stock Exchange, winners beat losers 12 to 5 as 1.55 billion shares changed hands. On the Nasdaq, advancers beat decliners nine to five on volume of 1.72 billion shares.
In economic news, the number of Americans filing new claims for unemployment last week rose 5,000 to 310,000, the government said Thursday morning, below forecasts for a rise to 320,000.
Stocks managed a modest advance Wednesday on a late-session jump. An encouraging Fed "beige book" read on the economy, and strength in tech after Amazon.com's solid earnings were among the factors sparking the rise.
U.S. light crude oil for September delivery rose 83 cents to settle at $59.94 a barrel on the New York Mercantile Exchange.
Treasury prices jumped, lowering the yield on the 10-year note to 4.19 percent from 4.25 percent late Wednesday. Treasury prices and yields move in opposite directions.
In currency trading, the dollar fell versus the euro and was little changed versus the yen.
COMEX gold rose $2.70 to settle at $433.30 an ounce.
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