U.S. Stocks Hit New Highs After Wal-Mart Hikes Forecast

NEW YORK (MarketWatch) - U.S. stocks on Thursday climbed to new heights after Wal-Mart Stores Inc., the world's biggest retailer, hiked its profit expectations for the third quarter and data cast a more positive light on the economy.

"Wal-Mart actually raising guidance I think gave people confidence that the third-quarter slowdown that we've seen from a lot of the retailers might have just been temporary," said Kevin Kruszenski, head of trading at KeyBanc Capital Markets.

With hopes for a stronger fourth quarter as earnings season gets under way, the markets seems to be giving retailers ""a pass for the third quarter." .

After hitting an all-time high of 14,197.8, the Dow Jones Industrial Average was more recently up 111.9 points at 14,190.8.

The S&P 500 also reached a fresh high of 1,576.09. The index was more recently up 12.62 points at 1,575.09. The Nasdaq Composite gained 19.40 points to 2,831.01, after climbing as high as 2,834.00 earlier on, its highest level since early 2001.

Of the Dow's 30 components, 23 advanced, led by General Motors Corp. , which climbed 5.2% to near three-year highs after the United Auto Workers said its members approved a contract with the company.

Another blue chip, Wal-Mart , advanced 3.6% after the discount retailer raised its outlook more than analysts expected.

U.S. retailers at large, however, reported poorer-than expected September same-store sales, and a handful, from Target Corp. to J.C. Penny Co. , cut their forecasts.

Of the Dow's declining stocks, Boeing Co. dropped the most, falling 1.7%, in another day of fallout after Wednesday's disclosure of delivery delays in the aircraft manufacturer's new widebody jet.

Volume on the New York Stock Exchange hit 707 million shares, with advancing stocks outran declining issues more than 2 to 1. On the Nasdaq, more than 1.1 billion shares were exchanged, with advancers topped decliners by about 4 to 3.

Ahead of the opening bell, stock futures climbed extended gains after Wal-Mart raised its outlook, and then advanced further after early economic data had the government reporting a drop in weekly jobless claims , firm import prices , and a narrowing of the U.S. trade deficit to $57.6 billion in August. .

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Limited Brands Inc. reported a 4% decline in same-store sales, missing analyst expectations for a 1.4% rise. Shares of the company gained 2.8%.

PepsiCo Inc. shares rose 2.3% after it reported better-than-expected earnings and revenue growth.

On the New York Mercantile Exchange, crude-oil futures for November delivery gained $2.02, or 2.5%, to $83.33 a barrel. .

Gold futures rose, with the contract for December delivery recently up $11.60, or 1.6%, at $757.6.

The dollar fell against the euro and firmed against the yen, with the dollar index, which tracks the greenback against a basket of major currencies, slipping 0.4%.

Treasury prices fell early on Thursday, lifting their yields, after the early economic data dented expectations that a slowing economy would lead the Federal Reserve to further cut interest rates. The benchmark 10-year Treasury bond was down 10/32 to 100 15/32, yielding 4.688%.

European shares posted solid gains, with the German DAX 30 index and the French CAC 40 index both climbing 0.6%. In London, miners helped the top share index gain for the fifth time in seven sessions. .

By Kate Gibson