The Dow and the S&P 500 closed at record highs on Thursday after Morgan Stanley and others reported better-than-expected earnings and Federal Reserve Chairman Ben Bernanke's comments further reassured markets.
Shares of Morgan Stanley (MS.N) jumped 4.4 percent to $27.70, its highest close since April 2011, after the bank posted a 42 percent increase in quarterly profit as stock trading revenue soared. Earlier, Morgan Stanley's stock hit a session high of $27.95, its highest intraday level since April 2011. The S&P financial index .SPSY climbed 1.3 percent.
Of the 21 financial companies that have reported quarterly earnings so far, 76 percent have surpassed analysts' estimates, Thomson Reuters data showed.
UnitedHealth (UNH.N) shares rallied, bolstering the Dow and other health insurers' stocks. UnitedHealth gained 6.5 percent to $70.55 after the company's results beat expectations, while the Morgan Stanley healthcare payor index .HMO rose 3.1 percent.
Both the Dow and the S&P 500 also hit all-time intraday highs shortly after the opening bell. The Dow climbed as high as 15,589.40, while the S&P 500 touched a session high of 1,693.12.
Bernanke, speaking before the Senate Banking Committee, reiterated comments he made on Wednesday to the House Financial Services Committee. He stressed that the timeline for winding down the Fed's stimulus program was not set in stone.
"We got no negative surprises from the Fed chairman today, so the market liked that," said Bucky Hellwig, senior vice president of BB&T Wealth Management in Birmingham, Alabama.
The Dow Jones industrial average .DJI rose 78.02 points, or 0.50 percent, to 15,548.54, a record closing high. The Standard & Poor's 500 Index .SPX advanced 8.46 points, or 0.50 percent, to a record close of 1,689.37. The Nasdaq Composite Index .IXIC gained just 1.28 points, or 0.04 percent, to end at 3,611.28.
The benchmark S&P 500 is up 18.5 percent for the year.
Analysts' estimates for corporate earnings have been lowered so much that investors believe the low targets should be easily exceeded. Instead, investors will likely hone in on revenue figures and outlooks.
"Earnings have been pretty much coming in, in line with expectations," Hellwig said.
IBM (IBM.N) raised its full-year outlook and reported earnings that beat estimates, though the company's revenue missed forecasts. Shares of International Business Machines rose 1.8 percent to $197.99. IBM gave one of the biggest lifts to the S&P 500 and helped offset the impact of slides in Intel (INTC.O) and eBay (EBAY.O).
Intel, which also curbed the Nasdaq's gain, slid 3.8 percent to $23.24 after the world's biggest chipmaker cut its full-year revenue forecast. Shares of eBay fell 6.7 percent to $53.52 after the e-commerce company said full-year results would be at the low end of its forecast range.
Analysts expect S&P 500 companies' second-quarter earnings to have grown 3.5 percent from a year earlier, with revenue up 1.1 percent, according to Thomson Reuters data. So far, 70.4 percent of all companies that have reported results have surpassed analysts' earnings expectations, while 49.4 percent have topped revenue views.
A meeting of Dell (DELL.O) shareholders to vote on founder Michael Dell's $24.4 billion offer to take the company private was adjourned to next week. Dell's stock rose 1.9 percent to $13.12.
After the bell shares of Google (GOOG.O) fell 4.9 percent to $865.73 following the release of its results. Google ended the regular session down 0.9 percent at $910.68.