NEW YORK (CNNMoney.com) -- Stocks rallied Thursday afternoon, with the Dow Jones Industrial average climbing well past the 11,900 barrier for the first time ever, after several key earnings reports and good news from the Federal Reserve.

The Dow (up 85.16 to 11,937.29, Charts) jumped 100 points, or more than 0.8 percent, with 40 minutes left in the session.

The world's most widely watched stock market gauge hit a new record trading high of 11,955.46, surpassing the previous record set Tuesday, and coming within 50 points of 12,000 - the next major milestone for the market.

The broader S&P 500 (up 11.47 to 1,361.42, Charts) index rose 0.9 percent while the tech-fueled Nasdaq composite (up 26.59 to 2,334.86, Charts) added 1.5 percent.

Stocks fell Wednesday on weaker than expected earnings reports and news that a small plane had hit a New York high rise apartment building. (Full story.)

But all three major gauges turned higher Thursday after oil prices fell to their lowest level this year, and the stock rally continued even as oil bounced back.

A slew of upbeat earnings reports and an indication of economic strength by the Fed's Beige Book, which was released at 2 p.m. ET, added to the positive momentum.

Investors reacted positively to the Fed's report that the economy continued to grow despite cooling in the housing market, according to Art Hogan, chief market strategist at Jefferies & Co.

"On the whole, the general theme supports a soft landing (for the economy), and that's good news for the market," Hogan said.

Dow component McDonald's (up $0.78 to $42.03, Charts) rose 2 percent, making it one of the Dow's top gainers, after the fast-food chain said third-quarter earnings would be better than analysts expected.

Of the 30 blue chips in the Dow, 21 rose and nine fell.

Soft drink and snack company PepsiCo (down $1.06 to $62.80, Charts) reported higher earnings and raised its earnings guidance for the full year, but shares slumped 2 percent.

Shares of Costco (up $3.82 to $53.89, Charts) soared 8 percent after the wholesale retailer reported slightly improved results that beat lowered estimates.

Shares of Wendy's International (up $0.76 to $34.48, Charts) jumped nearly 3 percent after the fast-food chain said it will return $1 billion to shareholders through share buybacks and dividends.

News that Palm (up $0.60 to $15.91, Charts) introduced an updated version of its Treo phone sent shares of the smart phone maker up 3.5 percent. Rival Research In Motion (down $0.54 to $111.11, Charts) slid 1 percent.

Harley-Davidson (up $1.76 to $64.91, Charts) posted better-than-expected results, sending shares up nearly 3 percent.

But shares of Winnebago Industries (down $1.19 to $33.17, Charts) sank over 4 percent after the motor-home manufacturer reported sharply lower profits

Market breadth was positive. On the New York Stock Exchange, losers beat winners by three to one on volume of 1.1 billion shares. On the Nasdaq, decliners topped advancers by three to one on volume of 1.4 billion shares.

Light, sweet crude for November delivery rose 62 cents to $58.21 a barrel on the New York Mercantile Exchange after the government's weekly inventory report.

On the economic front, the economy kept growing since early September but certain sectors like real estate are showing weakness, the Federal Reserve said in its Beige Book summary of economic conditions.

And the trade gap rose to a record level in August. U.S. imports outstripped exports by $69.9 billion in August, up from the previous record $68.0 billion level set in July, according to the Commerce Department.

Treasurys were little changed, with the yield holding at around 4.78 percent, the level they reached late Wednesday following the release of the minutes of the latest Federal Reserve meeting. The minutes showed central bank policymakers still concerned about the risk of inflation.

The dollar was lower against the euro and the yen.

COMEX gold for December delivery rose $3.80 to $580.30 an ounce.

Stocks ended mixed in Asia and posted modest gains in Europe.

Bulls to keep running, for now

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