Dow, S&P in record territory

NEW YORK (CNNMoney.com) -- Stocks rallied Thursday morning, sending the Dow and S&P 500 to fresh intraday records after Wal-Mart stores raised its third-quarter earnings forecast and a report showed the trade deficit narrowed in August.

The Dow Jones industrial average (Charts) added 0.5 percent over 90 minutes into the session, briefly touching an all-time intraday high of 14,171.52 before pulling back a bit. The broader S&P 500 (Charts) index gained 0.5 percent and briefly touched a record intraday high of 1,573.22.

The tech-heavy Nasdaq composite (Charts) added 0.5 percent, after ending the previous session at a 6-1/2 year high.

The Dow and S&P 500 slipped Wednesday, one session after hitting all-time highs. But stock investors were willing to restart the rally Thursday, thanks to corporate and economic news.

Wal-Mart Stores (Charts, Fortune 500), the world's largest retailer, said it now expects to earn 66 cents to 69 cents per share, up from a previous range of 62 to 65 cents. The Dow company attributed this strength to cost-cutting rather than sales growth.

Wal-Mart also reported tepid September sales growth, but investors sent the stock 3.3 percent higher anyway.

But Wal-Mart was a standout, with many retailers providing weak September sales numbers and some issuing earnings warnings, including Nordstrom (Charts, Fortune 500). The high-end retailer said it struggled with high inventory levels, a potentially bad sign for consumer spending going into the holiday shopping season.

Automakers were stronger, after the Chrysler strike ended quickly and UAW workers at GM ratified their new four-year contract. GM (Charts, Fortune 500) and Ford Motor (Charts, Fortune 500) shares gained.

Apple (Charts, Fortune 500), eBay (Charts, Fortune 500) and Google (Charts, Fortune 500) were among the big technology shares continuing to boost the Nasdaq.

Market breadth was positive. On the New York Stock Exchange, winners beat losers 7 to 3 on volume of 380 million shares. On the Nasdaq, advancers topped decliners 8 to 5 on volume of 650 million shares.

PepsiCo (Charts, Fortune 500) reported higher quarterly sales and earnings that topped estimates. However, investors took a 'sell the news' approach, sending shares a bit lower.

Alcoa unofficially kicked off the third-quarter earnings reporting period earlier this week and GE will be the next bellwether to open the books, when it reports results on Friday. But the big wave of earnings doesn't really kick in until next week.

Currently, earnings are expected to have grown just 1.4 percent in the third quarter, according to tracking firm Thomson Financial, the worst quarterly growth figure in more than five years.

In economic news, the trade deficit fell to a 7-month low, thanks to strong sales overseas and the impact of the weak dollar.

The number of Americans filing new claims for unemployment fell last week, versus expectations for the number to hold steady. The four-week moving average, considered to be a more reliable number, also dropped.

Another report showed that the number of mortgage delinquencies fell in September after hitting a 32-month high in August.

In global trade, Asian markets ended higher and European markets rose in afternoon trading.

Treasury prices fell, raising the yield on the benchmark 10-year note to 4.68 percent from 4.65 percent late Wednesday. Bond prices and yields move in opposite directions.

COMEX gold for December delivery rose $9 to $755 an ounce.

U.S. light crude oil for November delivery rose 95 cents to $82.25 a barrel on the New York Mercantile Exchange. Prices gained after the weekly government report showed a drop in crude inventories.