NEW YORK (CNNMoney.com) - Stocks surged Thursday, gaining for the third session in a row, as upbeat earnings from Hewlett-Packard and some continued good momentum gave investors an incentive to extend the recent advance.

The Nasdaq composite (up 18.20 to 2,294.63, Charts) added 0.8 percent and the Standard & Poor's 500 (up 9.38 to 1,289.38, Charts) index added about 0.7 percent.

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The Dow Jones industrial average (up 61.71 to 11,120.68, Charts) added nearly 0.6 percent, closing at a fresh 4-1/2 year high.

After struggling to maintain modest gains through the early afternoon, stocks managed a late-session run.

Treasury prices crept higher, lowering the corresponding yields while the dollar was little changed versus other major currencies. Gold and oil prices gained.

After the close, Dell (Research) reported quarterly earnings and revenue that rose from a year ago and topped estimates. However, the company also issued a current-quarter earnings and revenue forecast that is short of Wall Street predictions, and shares dipped modestly in after-hours trading.

Time Warner could be active Friday morning, after reports said investor Carl Icahn is giving up his battle for the company. (Full Story).

In addition to the corporate news, Friday trade was likely to be influenced by the morning's economic news, including reads on producer prices in January and consumer sentiment in February.

AS of 6:00 p.m. ET, Nasdaq and S&P futures pointed to a flat open for stocks, when fair value is taken into account.

Stock investors on Thursday welcomed strong housing and manufacturing numbers, upbeat earnings from Hewlett-Packard (released Wednesday afternoon) and showed a positive reaction to new Federal Reserve chief Ben Bernanke's two days on Capitol Hill.

All these factors were giving a quiet session an upward tilt, said Joe Sunderman, market analyst at Schaeffer's Investment Research.

"I think it's good that thus far the market has been able to put back-to-back up days together and to hold on to those gains today," Sunderman said.

However, he noted that the Dow and S&P 500 are in a pivotal place as they hit up against key technical levels that could either give stocks an extra boost, or send them back to the lower portion of the recent trading range.

Stocks may have a hard time breaking out of the range in the near term, said John Forelli, portfolio manager at Independence Investments.

"In general, we're in this low news flow period where most of the earnings are already out and it's pretty apparent that the Fed is going to keep raising rates," Forelli said.

Hewlett-Packard (up $2.35 to $34.02, Research) reported higher fiscal first-quarter earnings and revenue that rose from a year earlier. The tech bellwether also issued a current-quarter earnings forecast above analysts' current estimates. (Full story)

HP shares jumped 7.4 percent and supported both the Dow industrials, of which HP is a component, and the broader tech sector.

Network Appliance (up $2.42 to $33.58, Research) reported higher third-quarter earnings and revenue that topped forecasts and issued a bullish fourth-quarter earnings forecast. That sent shares of the computer data storage maker up 7.8 percent Thursday.

Applied Materials (down $0.50 to $19.96, Research) reported higher quarterly earnings -- excluding charges -- that rose from a year earlier. The chip gear maker also issued a bullish current-quarter revenue forecast.

Investors used the report as a reason to take profits on the chipmaker. Nonetheless, the broader chip sector jumped. The Philadelphia Semiconductor (up 7.72 to 545.95, Charts) index, or the SOX, added 1.4 percent.

The chip sector and the Nasdaq tend to move in tandem.

U.S. light crude oil for March delivery added 81 cents to settle at $58.46 a barrel on the New York Mercantile Exchange, rebounding after losing 3 percent Wednesday. But that price is still generally supportive for stocks as it remained below $60 a barrel.

Holders of energy shares used the opportunity to get back into the sector. The Philadelphia Oil Service sector (up 4.89 to 195.01, Charts) index gained 2.6 percent.

On the downside, XM Satellite Radio Holdings (down $1.27 to $23.98, Research) slipped in active Nasdaq trade after reporting a steeper-than-expected loss Thursday morning. The company also disclosed that a director had resigned because he believed there was a significant chance of a crisis in XM's future.

Online travel booker Expedia (down $4.43 to $19.82, Research) slumped 18.3 percent in active Nasdaq trade after reporting lower-than-expected quarterly earnings late Wednesday and issuing a weaker 2006 outlook.

Market breadth was positive. On the New York Stock Exchange, winners topped losers eleven to five on volume of 1.66 billion shares. On the Nasdaq, advancers topped decliners three to two on volume of 1.98 billion shares.

A morning report showed a strong rebound for the recently slowing housing market. Housing starts surged to the highest point in 33 years in January, buoyed by unseasonably warm weather, the government reported. Building permits also gained.

A separate report showed a larger-than-expected rise in weekly jobless claims. Yet, the number remained below 300,000, considered a positive by economists.

A midday report on manufacturing in the Mid-Atlantic region gave stocks some additional support in the afternoon.

The Philadelphia Fed index, released at noon, shot up to 15.4 in February from a 3.3 reading in January, surpassing the average estimates of economists surveyed by Briefing.com.

In his first public engagement as new Fed chief, Ben Bernanke told Congress on Wednesday and then again on Thursday that the economy remains strong but so do inflationary pressures, and this could lead to more interest rate hikes.

His comments were seen as basically reiterating the statement from the last Fed policy meeting.

Treasury prices inched higher, lowering the yield on the 10-year note to 4.58 percent from 4.60 percent late Wednesday. Bond prices and yields move in opposite directions.

In currency trading, the dollar rose versus the euro and yen.

COMEX gold for April delivery added $6.10 to settle at $548.80 an ounce.

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