Dow 10,000: Day two

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When Wall Street nearly collapsed

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NEW YORK (CNNMoney.com) -- The Dow carved out another one-year high Thursday as rising oil prices and a late-session rally overshadowed bank sector caused by Citigroup's and Goldman Sachs' profit reports.

The Dow Jones industrial average (INDU) gained 47 points, or 0.5%, closing above 10,000 for the second session in a row. The Dow is currently at its highest point since Oct. 3, 2008, when it closed at 10,325.38.

The S&P 500 (SPX) index edged up 4 points, or 0.4% and the Nasdaq composite (COMP) ended just above unchanged.

Weakness in financial shares dragged on stocks through the early afternoon. But a 3% spike in oil prices caused energy stocks to rise late in the session, with Dow stocks Chevron (CVX, Fortune 500) and Exxon Mobil (XOM, Fortune 500) among the big gainers.

After the close, Google (GOOG, Fortune 500) reported a third-quarter profit that topped estimates, sending shares 2% higher. Google CEO Eric Schmidt said in a statement that "we believe the worst of the recession is behind us and we now feel comfortable investing heavily in our future."

Also after the close, Dow component IBM (IBM, Fortune 500) reported higher quarterly earnings that topped estimates and lower quarterly revenue that topped estimates. Looking forward, the company said it expects full-year 2009 earnings of at least $9.85 per share versus its previous forecast of $9.70 per share.

Friday brings the October consumer sentiment index from the University of Michigan and government readings on September industrial production and capacity utilization. Dow stocks Bank of America (BAC, Fortune 500) and General Electric (GE, Fortune 500) are both expected to report results before the start of trading.

Strong quarterly results from JPMorgan Chase and Intel helped fuel a big advance on Wall Street Wednesday, pushing the Dow to close above 10,000 for the first time in over a year. But stronger-than-expected results from Citi and Goldman had less impact Thursday.

The 10,000 number is more psychological than anything else, as it's a round number and also puts the Dow back to where it stood just after the collapse of Lehman Brothers last year. But analysts say that the just-getting-started third-quarter reporting period is what's really going to determine whether stocks keep moving higher.

The early results have been good -- with roughly 75% of companies beating earnings estimates. Also, revenues have shown some stabilization. Should that trend continue, it would help assuage fears that cost-cutting is the only thing helping earnings stabilize and that little topline growth exists.

"The first real week or so is not necessarily indicative of what the rest of the earnings are going to look like," said Burt White, chief investment officer at LPL Financial. "That said, the trend of earnings beating expectations is going to continue. Conditions are improving faster than people have been expecting."

Results: Goldman Sachs (GS, Fortune 500) reported a $3.2 billion quarterly profit, thanks to strength in its trading business, which has recovered this year. The financial behemoth reported quarterly revenue and earnings that rose from a year ago and topped estimates.

The company's chief executive said the strong quarter was due to signs of stabilization and growth across a variety of sectors.

Citigroup (C, Fortune 500) reported a quarterly loss Thursday due to the ongoing impact of the credit crisis. But the loss was narrower than analysts had been expecting.

On Wednesday, JPMorgan Chase (JPM, Fortune 500) said it earned $3.6 billion in the quarter, also due to strength in its investment business.

Economy: The morning brought a mix of economic news, with readings on consumer inflation, jobs and manufacturing all in the mix.

The Consumer Price index (CPI) rose 0.2% in September, after rising 0.4% in August. The rise was in line with a consensus of economists surveyed by Briefing.com.

The so-called core CPI, which strips out volatile food and energy, rose 0.2% after rising 0.1% in August. Economists thought it would rise 0.1%.

Around 514,000 people filed new claims for unemployment last week, down from a revised 524,000 in the previous week. Economists expected 520,000 new claims.

Continuing claims, a measure of those who have been receiving benefits for a week or more, fell to 5.992 million from 6.067 million in the previous week, versus forecasts for a smaller drop to 6 million.

Two regional manufacturing reports were also released. The Philadelphia Fed index dipped to 11.5 in October from 14.1 in the previous month, versus forecasts for a smaller slide to 12.

The Empire State Manufacturing Index, which measures activity in the New York region, rose to 34.57 in October from 18.88 in September. Economists thought it would fall to 17.25

World markets: Global markets were mixed. In Europe, London's FTSE 100 fell 0.6%, France's CAC 40 ended little changed and Germany's DAX lost 0.4%. Asian markets ended higher, with Japan's Nikkei rising 1.8%.

Bonds: Treasury prices fell, boosting the yield on the 10-year note to 3.46% from 3.42% late Wednesday. Treasury prices and yields move in opposite directions.

Currency and commodities: The dollar fell versus the euro and gained against the yen, turning mixed after its recent across-the-board weakness versus a basket of currencies.

U.S. light crude oil for November delivery rose $2.41 to $77.59 a barrel on the New York Mercantile Exchange, following the morning's weekly inventories report from the government. Oil prices ended the previous session at the highest level in a year.

COMEX gold for December delivery fell $14.90 to $1,049.00 an ounce. Gold has been hitting record highs almost daily in response to a weak U.S. dollar and ongoing concerns about inflationary pressures.