The Standard & Poor's 500 index topped the 1,200 mark Wednesday for the first time in a year and a half. The Dow Jones industrial average rose 104 points and moved above 11,100.
The good news came from all directions: Corporate earnings numbers and government reports on retail sales and regional economic conditions indicated that the recovery is taking hold.
One of the biggest forces behind the market's climb came from JPMorgan Chase, which reported a better-than-expected profit for the January-March quarter. The bank is still facing big losses from souring consumer loans, but CEO Jamie Dimon said there have been clear improvements in the economy.
The forecast from chipmaker Intel boosted the technology-dominated Nasdaq composite index. Intel posted earnings and revenue after the closing bell Tuesday that topped analysts' expectations. The company also raised its 2010 outlook.
JPMorgan rose 4.1 percent, while Intel added 3.3 percent.
Michael Binger, portfolio manager at Thrivent Investment Management in Minneapolis, said the strong results from leaders of the banking and technology industries are signs that a rebound is in place.
"It diminishes the chance that we go back into a double-dip recession," he said. "It lends credence that the financial industry is recovering and the tech industry is beyond recovering and is doing very well."
A Commerce Department report that retail sales rose more than expected in March added to a sense that consumers are feeling more comfortable spending.
The Federal Reserve said its survey of regional economic activity found that business was getting better in most areas of the country. The report offered a brighter assessment of the economy than the previous survey in early March.
Fed Chairman Ben Bernanke told Congress' Joint Economic Committee that the recovery should hold but that high budget deficits must be addressed to avoid big jumps in interest rates. Bernanke cautioned that unemployment will remain an obstacle.
The stock market has been rising for more than a year and has advanced steadily for two months on encouraging signs of growth. Some analysts have warned that shares have climbed too high, but the latest reports eased some concerns that prices are stretched.
The Dow rose 103.69, or 0.9 percent, to 11,123.11. The Dow closed over 11,000 on Monday for the first time since September 2008. It is up 2.1 percent in five days, its best advance since early March.
The S&P 500 index rose 13.35, or 1.1 percent, to 1,210.65. It was the biggest percentage gain since March 5. Like the Dow, the S&P 500 index is at its highest level since September 2008, when the financial crisis began. The S&P 500 index is up 79 percent from a 12-year low in March last year though it would still need to gain 23 percent to reach its October 2007 high of 1,565.
The Nasdaq rose 38.87, or 1.6 percent, to 2,504.86. It hasn't been above 2,500 since June 2008. The Nasdaq has nearly doubled since last March but it is still down by half from its peak of 5,048.62 in March 2000.
The stronger signs about the economy hurt bond prices and raised yields. The yield on the benchmark 10-year Treasury note rose to 3.87 percent from 3.82 percent late Tuesday.
The dollar fell against other major currencies, while gold rose.
Crude oil rose $1.79 to $85.84 per barrel on the New York Mercantile Exchange.
Strength at JPMorgan Chase's investment bank helped offset losses from consumer loan defaults and propelled the company's profit above analysts' expectations. JPMorgan said it plans to add 9,000 employees in the U.S.
Intel's first-quarter results easily topped analysts' expectations. The results indicated that businesses are stepping up their technology spending on growing confidence about the economy. Intel said its profit margin will be better than it had estimated for 2010 and that it plans to hire 1,000 workers.
JPMorgan and Intel were the biggest gainers among the 30 stocks that make up the Dow industrials. JPMorgan rose $1.86, or 4.1 percent, to $47.73. Intel climbed 75 cents, or 3.3 percent, to $23.52.
CSX, the nation's third largest railroad, rose $2.18, or 4.1 percent, to $55.46 after reporting a 20 percent increase in its first-quarter earnings. The company said it has seen "gradual and steady growth" in the economy. It has also started hiring.
"That was the real positive surprise. You hadn't really heard about big companies hiring," said Peter Tuz, president of Chase Investment Council in Charlottesville, Va.
Tuz said the strength of the earnings signals that stocks could be properly valued and perhaps even cheap.
The government offered investors more signs the economy is improving. Retail sales rose 1.6 percent in March, the third consecutive month of growth. That was bigger than the increase of 1.2 percent economists had expected, according to Thomson Reuters.
The Consumer Price Index, a measure of inflation at the retail level, rose 0.1 percent in March. That was in line with economists' forecast.
The Fed has said that inflation isn't a problem. Without an immediate threat of rising prices, policymakers have been able to hold the Fed's key interest rate at a record low of essentially zero. The Fed wants to keep rates low to stimulate lending and help revive the economy.
Health care, consumer staples and utilities stocks lagged after traders grew more confident about the economy. These industries are seen as safe in weak economies but fall out of favor when business growth is expected to increase.
About three stocks rose for every one that fell on the New York Stock Exchange, where consolidated volume rose to 5.7 billion shares compared with 5.4 billion Tuesday.
The Russell 2000 index of smaller companies rose 15.37, or 2.2 percent, to 722.40.
Britain's FTSE 100 gained 0.6 percent, Germany's DAX index rose 0.8 percent, and France's CAC-40 rose 0.6 percent. Japan's Nikkei stock average rose 0.4 percent.