NEW YORK (AP) — Encouraging news about the U.S. economy boosted the stock market on Wednesday.
In a sign that workers are in less danger of being laid off, the number of Americans seeking unemployment benefits dropped 10,000 last week to a seasonally adjusted 316,000, the Labor Department said. A private survey by the University of Michigan and financial data company Thomson Reuters showed that consumer confidence rose in November.
"Today's economic news was generally favorable," said Terry Sandven, chief equity strategist for U.S. Bank Wealth Management. "In the absence of bad news, the path of least resistance for equities is up."
The stock market is trading at record levels on a combination of solid corporate earnings, a slowly recovering economy and easy-money policies from the Federal Reserve. The Fed is buying $85 billion in bonds every month to keep long-term interest rates low, making bonds less attractive than stocks for investors.
Gains in the broader market were led by technology stocks. Hewlett-Packard, which surged $2.48, or 10 percent, to $27.57, rose the most in the Standard & Poor's 500 index.
The world's second-largest maker of PCs earned $1.4 billion in its fiscal fourth quarter and issued a strong profit forecast for its current quarter.
The Standard & Poor's 500 index climbed three points, or 0.2 percent, to 1,806 as of 2:18 p.m. Eastern Time. The Dow Jones industrial average rose six points, or less than 0.1 percent, to 16,079.
The biggest gainer among major stock indexes was the Nasdaq composite, which closed above 4,000 for the first time in 13 years Tuesday. The index advanced 18 points, or 0.4 percent, to 4,036, Wednesday afternoon.
The S&P 500 has advanced 26.63 percent this year, putting it on course for its best annual performance since 1998. Much of the gain has come because investors have been willing to pay more for a company's stock in relation to its earnings.
The price-earnings ratio for S&P 500 companies has climbed to 15.1 from 12.6 at the start of the year, but it's still below the average ratio of 16.5 for the last 20 years.
"When times are good, you have to ask if it's a sign that things are about to become bad," said Art Steinmetz, President & Chief Investment Officer at Oppenheimer Funds. But Steinmetz feels reasonably hopeful that stock valuations "are not overstretched."
In other corporate news, Analog Devices fell $2, or 4 percent, to $47.92 after the chipmaker reported sales late Tuesday that fell below Wall Street estimates. The Norwood, Mass., company expects a seasonal slowdown to hurt revenue during the holidays.
Trading volumes were lower than average ahead of Thursday's Thanksgiving holiday, when financial markets will be closed. The New York Stock exchange and the Nasdaq will also close early on Friday.
The yield on the 10-year Treasury note rose to 2.74 percent from 2.71 percent on Tuesday.
The price of oil dropped Wednesday to its lowest level since early June as the U.S. government reported the 10th straight weekly increase in crude supplies. Oil dropped $1.53, or 2 percent, to $92.14 a barrel.
Exxon Mobil and Chevron, both members of the 30-company Dow, declined. Exxon Mobil fell 46 cents, or 0.5 percent, to $93.81. Chevron fell 44 cents, or 0.4 percent, to $122.34.
In other commodities trading, Gold fell $1.90, or 0.2 percent, to $1,239.50 an ounce.