Stocks manage gains in choppy session

NEW YORK (CNNMoney.com) -- Stocks rose Thursday, led by technology shares, as investors looked past the day's ho-hum economic news and geared up for Intel's quarterly report, released shortly after the bell.

The Dow Jones industrial average (INDU) added 30 points, or 0.3%. The S&P 500 index (SPX) added 3 points, or 0.2%. Both closed at the highest point since Oct. 1, 2008. The Nasdaq composite (COMP) rose 9 points, or 0.4%, ending at the highest point since Sept. 3, 2008.

After the close, Dow component Intel (INTC, Fortune 500) said it earned 40 cents per share in the fourth quarter on sales of $10.6 billion. Both earnings and sales trounced estimates and marked a sharp improvement from the previous year. The stock gained 2% in extended-hours trading.

Overall S&P 500 earnings are expected to have risen more than 200% from the previous year, the worst quarter in Thomson's history. JPMorgan Chase (JPM, Fortune 500) is due to report results Friday morning.

The financial behemoth is expected to have earned 66 cents per share on revenue of $27 billion.

Stocks ended higher Wednesday, with the Dow closing at a 15-month high, as investors looked past Google's potential shutdown of its China operations and mea culpas from the nation's major bank executives. After a weak start Thursday, stocks turned higher, despite the day's mixed economic news.

The major indexes posted sizable gains last year as investors dove back in after moving beyond the worst financial crisis in decades. But any gains this year are likely to be more subdued.

"The next few months is going to be about merging expectations and reality," said Jack Ablin, chief investment officer at Harris Private Bank.

"Expectations have been set pretty high for earnings and the economy, in terms of where stock valuations are set," he said. "Now we need to see if the results can deliver."

Economy: Retail sales fell 0.3% in December, the government reported Thursday. The report was a surprise to economists who were expecting sales to have risen 0.5%, according to a consensus of economists surveyed by Briefing.com. Sales rose a revised 1.8% in November.

Retail sales excluding autos fell 0.2% in December after rising 1.9% in the previous month. Economists thought they would rise 0.3%.

Helping to soften the blow, the National Retail Federation said holiday sales for the November-December period rose 1.1%, a better showing than the retail group's forecast of a 1% decline.

The number of Americans filing new claims for unemployment rose last week to 444,000 from 433,000 in the previous week. Economists thought claims would rise to 437,000.

Continuing claims, a measure of Americans who have been receiving benefits for a week or more, fell to 4.596 million from 4.807 million in the previous week. Economists thought claims would fall to 4.750 million.

November business inventories rose 0.4% after rising 0.4% in the previous month. Economists thought claims the increase would be 0.3%.

Banks: A congressionally appointed panel investigating the lead-up to the financial crisis was holding a second day of hearings, with government officials including Attorney General Eric Holder testifying.

On Wednesday, CEOs of the largest financial institutions testified that while the banks took on too much risk and made mistakes, they were not aware at the time that a financial crisis of such a magnitude could develop.

In other news, President Obama proposed a plan Thursday to tax companies that took bailout funds, legislation he says is necessary to make sure the banks return the money they accepted in full.

Results: Intel shares gained ahead of its results. Merck (MRK, Fortune 500), Microsoft (MSFT, Fortune 500), IBM (IBM, Fortune 500) and Hewlett-Packard (HPQ, Fortune 500) were the Dow's other big gainers.

Market breadth was positive. On the New York Stock Exchange, winners beat losers by four to three on volume of 890 million shares. On the Nasdaq, advancers topped decliners five to four on volume of 2.3 billion shares.

World markets: Asian and European markets mostly ended higher.

Commodities and the dollar: The dollar fell against the euro and gained versus the yen.

COMEX gold for February delivery rose $6.20 to settle at $1,143 an ounce. Gold closed at an all-time high of $1,218.30 an ounce last month.

U.S. light crude oil for February delivery fell 26 cents to settle at $79.39 a barrel on the New York Mercantile Exchange.

Bonds: Treasury prices rallied, lowering the yield on the 10-year note to 3.73% from 3.79% late Wednesday. Treasury prices and yields move in opposite directions.