Stocks finished broadly higher on Thursday, steering the benchmark S&P 500 toward its best one-month gain since 2015 and its best January since 1987.
The S&P 500 index rose 23 points, or 0.9 percent, to close at 2,704. For the month, the broad market benchmark rose 7.9 percent.
Today's increase followed Wednesday's jump of 1.55 percent for S&P 500 after the Federal Reserve signaled that it's pausing its rate-hike strategy for now. That "put the S&P 500 on track to post its 9th best January on record since 1928," according to Jodie Gunzberg, head of U.S. equities at S&P Dow Jones Indices. Thursday's increase sealed that historic move.
The Dow Jones industrials ticked lower by 15 points, or 0.1 percent, to end at 24,999. The Dow gained 7.2 percent for the month, giving the blue-chip index its best January since 1989.
The Nasdaq composite climbed 99 points, or 1.4 percent, finishing at 7,282.
Gains in communications and health care companies offset losses in banks and materials stocks.
Investors remained focused on corporate earnings, which have been mixed. Facebook jumped after reporting solid results for its fourth quarter, helping lift the tech-heavy Nasdaq composite. General Electric soared after reporting growth in key segments, while Microsoft and Visa fell. Homebuilders surged following new data showing sales of new U.S. homes soared in November.
The market has made a sharp turnaround in January after the worst December since 1931, though concerns linger over trade and global economic growth. Economic reports in Europe and China have been pointing to slower growth, and debate over Britain's exit from the European Union continues with no resolution in sight.
In the eurozone, Italy is now in recession, having shown economic contraction for two consecutive quarters. Italy's populist government has been in a dispute with EU officials over its spending plans.
Trade talks between the U.S. and China entered a second day Thursday. President Donald Trump voiced optimism before meeting with representatives from China, but noted there would be "no final deal" until he sits down with Chinese President Xi Jinping. Industrial and technology companies have warned about slowing sales because of the trade impasse.
Calming recession fears
"Overall, we're still encouraged that this earning season is comforting to people," said Ryan Detrick, senior market strategist at LPL Financial.
Strong results and outlooks from big U.S. companies seem to be calming some of the broader recession fears, he said. Results from the financial sector earlier this month were particularly encouraging.
Homebuilders climbed on new data showing sales of newly built homes soared in November. The Commerce Department said new home sales jumped 16.9 percent in November from the previous month. Despite the healthy gain, sales remain 7.7 percent below the pace from a year earlier. The report was delayed by the 35-day government shutdown. Meritage Homes led the pack, vaulting 10.1 percent to $45.08.
Industrial conglomerate General Electric reported mixed results for the fourth quarter, but revenue and profit were still higher across most of its segments. The company has been cutting costs and spinning off units for years in a bid to boost its bottom line.
The stock climbed 11.7 percent to $10.16. GE also reached a $1.5 billion settlement with the Department of Justice over its subprime mortgage business before the 2008 financial crisis.
Hottest start to a year since 2003
The S&P 500's end-of-month climb came after the index notched its hottest seven-day start to a year since 2003, noted Gunzberg of S&P Dow Jones Indices, after Fed Chairman Jerome Powell made some unexpectedly dovish comments at a conference on Jan. 4.
What might the S&P 500's robust start in January mean for the rest of 2019? Gunzberg pointed out that in the years that had the prior eight top Januaries, the S&P 500 finished positively six times, with five years racking up gains of over 19 percent. However, she added, "the subsequent Februaries were only positive half the time, with biggest gain being 5.99% in February 1975."
In a note on Thursday, LPL Financial wrote that February "hasn't been one of the best months for stocks. In fact, as our LPL Chart of the Day shows, since 1950, February has been virtually flat." It added, "we wouldn't be surprised at all to see a near-term consolidation or pullback."