NEW YORK – U.S. stocks advanced Thursday, following the Dow Jones industrial average’s biggest two-day slide in nearly a year, as earnings boosted consumer and materials shares.
Boeing and McDonald’s extended rallies to more than 5 percent to pace gains among large stocks. Dow Chemical Co. climbed by 4.6 percent, the most in a year, as earnings topped estimates. Harman International Industries surged by 24 percent to the highest since 2005 after raising its forecast. Amazon surged by 7.7 percent in late trading after sales and profit beat forecasts.
The S&P 500 climbed by 1 percent, to 2,021.25, reversing an earlier drop of 0.7 percent. The gauge is down by 1.8 percent for January, headed for the biggest monthly fall in a year. The Dow rose 225.48 points, or 1.3 percent, to 17,416.85. It fell 2.8 percent in the prior two days.
“It’s almost a relief rally you’re seeing here today,” said Bill Schultz, who oversees $1.2 billion as chief investment officer at McQueen, Ball & Associates in Bethlehem, Pa. “You had some decent earnings reports come out today indicating that the fears of drastic slowdown may not be as imminent as people had feared over the last two days.”
Goldman Sachs is poised to become the most heavily weighted component of the Dow after Visa completes a 4-for-1 stock split announced Thursday.
The Dow, which was created in 1896 by Dow Jones & Co. co-founder Charles H. Dow, is weighted based on the share prices of the 30 companies in the average. Visa, which closed at $248 a share, said the split will take effect March 19.
Investors assessed earnings from more than 50 companies from the S&P 500 index for clues on the strength of the U.S. economy a day after Federal Reserve policymakers boosted their assessment of the economy as the job market improved and fuel costs dropped.
Fed Chairwoman Janet L. Yellen told Democratic lawmakers Thursday that there were no plans to raise interest rates immediately, according to Sen. Charles E. Schumer, D-N.Y.
Companies from Procter & Gamble to DuPont and Pfizer had cited the greenback’s strength as a major head wind for profits. The strongest dollar in a decade is making American goods and services more expensive overseas, eroding sales.
Dow rose by 4.6 percent. The largest U.S. chemical company posted better-than-expected fourth-quarter earnings as lower oil and natural gas costs helped improve margins at its plastics business.
Coach Inc. advanced by 6 percent to the highest since June. The struggling handbag-maker posted second-quarter profit that topped analysts’ estimates as the company worked to increase sales of full-priced items and reduce discounts as part of its turnaround plan.
Harman International jumped by 24 percent, the most since 2011. The maker of Harman Kardon and JBL audio equipment reported second-quarter profit that exceeded analysts’ estimates and raised its full-year forecast.
Boeing rallied by 5.8 percent to an all-time high of $147.78. McDonald’s added 5.1 percent, the most since October 2008. The world’s largest restaurant chain appointed Steve Easterbrook as its next CEO, as it grapples with declining sales and earnings. Easterbrook, currently its chief brand officer, will succeed Don Thompson on March 1.
Apple climbed by 3.1 percent to its highest since Nov. 29.