Strong earnings from Bear Stearns and Lehman Bros., drop in jobless claims lift stocks

NEW YORK — Wall Street resumed its fourth-quarter rally Thursday, pushing the Dow Jones industrials to its first close above 12,400 after a series of strong company earnings and a drop in unemployment claims revived investors' confidence in the economy.

The market, which stalled earlier this week on interest rate and economic concerns, was reinvigorated by robust quarterly profits from Bear Stearns Cos., Lehman Brothers Holdings Inc., and Costco Wholesale Corp., as well as a healthy outlooks from Citigroup Inc. and Honeywell International.

Wall Street was also boosted by the Labor Department's report that the number of Americans filing for unemployment benefits plunged for a second straight week. The data suggested the U.S. economy won't cool as quickly as some investors feared.

"As far as I can tell, consumers keep spending as long as unemployment is low," said Ed Peters, chief investment officer at PanAgora Asset Management Inc.

Airline stocks were pummeled by rising oil prices, after the Organization of Petroleum Exporting Countries said it is keeping its oil production target stable for now, but making cuts in February. Overall, though, the stock market was unfazed by the possibility of higher fuel prices dampening consumer spending and hiking companies' materials costs.

According to preliminary calculations, the Dow rose 99.26, or 0.81 percent, to a new closing record of 12,416.76, after hitting a new trading high of 12,431.26 earlier in the session. The Dow, which last hit a record close of 12,342.56 on Nov. 17, is up 16 percent this year.

Broader stock indicators also rose sharply. The Standard & Poor's 500 index was up 12.28, or 0.87 percent, at 1,425.49, after reaching a six-year trading high of 1,427.23. The technology-laden Nasdaq composite index rose 21.44, or 0.88 percent, to 2,453.85.

Bond prices fell again Thursday, with the yield on the benchmark 10-year Treasury note rising to 4.59 percent from 4.58 percent late Wednesday. The dollar rose against other major currencies, and gold prices rose as well.

Oil prices shot higher after the OPEC announcement. Crude oil for January soared $1.13 to $62.50 a barrel on the New York Mercantile Exchange.

The stock market had been moving cautiously over the past week, inching up and then pulling back after the Federal Reserve left interest rates steady on Tuesday and offered no hints that it might start lowering them. But Thursday's positive corporate and economic news sparked a resumption of stock buying, extending the Dow's upward climb. The Dow reached record territory past 12,000 for the first time in nearly seven years this fall.