Dow guns for new closing record

NEW YORK (CNNMoney.com) -- Stocks surged Thursday, with the Dow looking to set a new closing record, as investors cheered strong earnings news from the banking sector, a drop in jobless claims and a rebound in the tech sector.

The Dow Jones industrial average (up 99.42 to 12,416.92, Charts) added 0.9 percent with about an hour left in trading. The broader S&P 500 index (up 13.08 to 1,426.29, Charts) and the tech-fueled Nasdaq (up 25.72 to 2,458.13, Charts) each jumped about 1 percent.

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Year-to-date, the Dow is up nearly 15 percent, the S&P 500 is up over 13 percent and the Nasdaq is up more than 10 percent. The Russell 2000 (up 7.40 to 796.15, Charts) small-cap index has risen more than 17 percent this year.

Citigroup raised its target for the Dow and S&P and implied double-digit percentage gains by the end of 2007. The bank now expect the Dow to top 14,000 and the S&P to hit 1,600.

Equities also benefited as the market continued the rally that began in the summer. Both Bear Stearns and Lehman Brothers reported higher quarterly earnings Thursday morning that beat estimates. Bear Stearns (up $4.24 to $160.13, Charts) shares rose, while Lehman (down $0.29 to $76.08, Charts) dipped.

Intel (up $0.18 to $20.88, Charts), Dell (up $0.89 to $26.96, Charts) and Amazon.com (up $0.74 to $39.24, Charts) were among the big technology shares leading the Nasdaq higher.

A variety of chip stocks jumped, including Altera (up $0.62 to $20.01, Charts), Advanced Micro Devices (up $2.29 to $22.46, Charts) and Xilinx (up $0.76 to $24.98, Charts). The Philadelphia Semiconductor (up 9.40 to 476.41, Charts) index, or the SOX, gained almost 2 percent.

Ciena (up $2.63 to $27.59, Charts) jumped 9 percent after reporting fiscal fourth-quarter profit versus a loss a year earlier. The telecom gear maker also issued an upbeat first-quarter 2007 profit outlook.

In deals news, Nestle said it's buying the medical nutrition unit of Swiss pharmaceuticals firm Novartis for $2.6 billion.

Market breadth was positive. On the New York Stock Exchange, winners topped losers two to one on volume of 1.15 billion shares. On the Nasdaq, advancers topped decliners two to one on volume of 1.46 billion shares.

Investors also considered a report that showed a surprisingly large drop in the number of Americans filing new claims for unemployment last week.

Also a factor: the possibility of the Democrats losing control of the Senate amid news that a senator from South Dakota was in critical condition after suffering a brain hemorrhage. (Full story)

U.S. light crude oil for January delivery gained $1.14 to $62.51 a barrel on the New York Mercantile Exchange after OPEC said it would cut production by 500,000 barrels per day starting Feb. 1.

Treasury prices fell, with the yield on the benchmark 10-year note rising to 4.60 percent from 4.58 percent late Wednesday. Bond prices and yields move in opposite directions.

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

COMEX February gold slipped $1.50 to settle at $630.90 an ounce.

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