Dow sets a record

NEW YORK (CNNMoney.com) -- Stocks surged Thursday, with the Dow Jones industrial average closing at an all-time high and the S&P 500 finishing at its 2006 peak, as investors cheered strong earnings news from the banking sector, a drop in jobless claims and a rebound in the tech sector.

The Dow (up 106.47 to 12,423.97, Charts) added 0.8 percent, according to early tallies. The broader S&P 500 (up 12.81 to 1,426.02, Charts) and the tech-fueled Nasdaq (up 23.14 to 2,455.55, Charts) composite each jumped just under 1 percent.

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The Dow broke through a previous record closing high of 12,342.56 set Nov. 17. It also hit a new trading high Thursday of 12,431.26.

The S&P's previous high for the year was 1,414.76 set Dec. 5. It's the index's highest close since November 2000.

The Nasdaq came within four points of its 2006 high.

Year-to-date, the Dow is up over 15 percent, the S&P 500 is up around 14 percent and the Nasdaq is up around than 11 percent. The Russell 2000 (up 6.73 to 795.48, Charts) small-cap index has risen roughly 17 percent this year.

The dollar gained, bonds fell and oil climbed over a dollar as OPEC cemented plans for another production cut.

Here's what moved the markets Thursday:

Citigroup raised its target for the Dow and S&P and implied double-digit percentage gains by the end of 2007. The bank now expect the Dow to top 14,000 and the S&P to hit 1,600.

Equities also benefited as the market continued the rally that began in the summer. Both Bear Stearns and Lehman Brothers reported higher quarterly earnings Thursday morning that beat estimates. Bear Stearns (up $4.26 to $160.15, Charts) shares rose, while Lehman (down $0.27 to $76.10, Charts) dipped.

Intel (up $0.10 to $20.80, Charts), Dell (up $0.82 to $26.89, Charts) and Amazon.com (up $0.51 to $39.01, Charts) were among the big technology shares leading the Nasdaq higher.

A variety of chip stocks jumped, including Altera (up $0.53 to $19.92, Charts), Advanced Micro Devices (up $2.60 to $22.77, Charts) and Xilinx (up $0.57 to $24.79, Charts). The Philadelphia Semiconductor (up 9.86 to 476.84, Charts) index, or the SOX, gained almost 2 percent.

Ciena (up $2.81 to $27.77, Charts) jumped 9 percent after reporting fiscal fourth-quarter profit versus a loss a year earlier. The telecom gear maker also issued an upbeat first-quarter 2007 profit outlook.

In deals news, Nestle said it's buying the medical nutrition unit of Swiss pharmaceuticals firm Novartis for $2.6 billion.

Market breadth was positive. On the New York Stock Exchange, winners topped losers two to one on volume of 1.15 billion shares. On the Nasdaq, advancers topped decliners two to one on volume of 1.46 billion shares.

Investors also considered a report that showed a surprisingly large drop in the number of Americans filing new claims for unemployment last week.

Also a factor: the possibility of the Democrats losing control of the Senate amid news that a senator from South Dakota was in critical condition after suffering a brain hemorrhage. (Full story)

U.S. light crude oil for January delivery gained $1.14 to $62.51 a barrel on the New York Mercantile Exchange after OPEC said it would cut production by 500,000 barrels per day starting Feb. 1.

Treasury prices fell, with the yield on the benchmark 10-year note rising to 4.60 percent from 4.58 percent late Wednesday. Bond prices and yields move in opposite directions.

In currency trading, the dollar rose against the yen and euro.

COMEX February gold slipped $1.50 to settle at $630.90 an ounce.

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