The Dow Jones industrial average touched another record high Tuesday after reports on auto sales and factory orders provided the latest evidence that the U.S. economy is strengthening. Traders plowed money back into European stocks on optimism that the financial situation in Cyprus has stabilized after a tense, four-day holiday weekend.
The Dow rose as much as 112 points late Thursday morning. The Standard & Poor's 500 index approached its own record high.
Health insurance companies powered the gains, a day after the government released revised Medicare Advantage rates that suggest funding cuts will be less severe than analysts and companies had feared.
The Dow was up 96 points, or 0.7 percent, at 14,669 as of 12:12 p.m. Eastern time. It had risen as high as 14,684 in the late morning.
The Standard & Poor's 500 index rose 11 points, or 0.7 percent, to 1,572. It is just a few points shy of its record trading high of 1,576, reached in October 2007.
The Nasdaq composite rose 27, or 0.8 percent, to 3,265.
European markets closed sharply higher on the first trading day after a tense, four-day holiday weekend. Paris' CAC-40 gained 2 percent, London's FTSE 100 1.2 percent and Frankfurt's DAX 1.9 percent.
The gains in Europe markets boosted confidence among U.S. investors, who had feared that bad news over the weekend would cause a sell-off as European markets reopened, Peter Tchir, who runs the hedge fund TF Market Advisors. That concern also weighed on U.S. stocks Monday, he said.
Instead, Europe rose strongly after U.S. markets opened Tuesday, feeding a virtuous cycle that sent stocks higher on both sides of the Atlantic, Tchir said.
"Everyone was waiting to see if Europe had problems from Cyprus," he said. "Instead, we got the all-clear signal."
The trading day began with solid March sales reports from U.S. automakers. Chrysler said it sold more cars and trucks than in any month since the Great Recession began, an increase of 5 percent. Sales for General Motors and Ford rose 6 percent.
Orders to U.S. factories rose 3 percent in February, the best gain in five months, the government said after trading began. The increase was driven by a surge in demand for commercial aircraft, an especially volatile category.
Health insurance companies rose the most of the 10 sectors in the S&P 500 index, more than 1 percent. The sector is up more than 16 percent this year.
Traders were relieved about the companies' prospects after Monday's news about Medicare Advantage rates. Preliminary data released in February had raised fears that companies offering the plans would be forced to cut benefits, increase customers' premiums or abandon some markets. This week's data suggest that may not be necessary.
UnitedHealth was the biggest gainer in the Dow. Humana Inc. led the S&P 500 higher. Also among the S&P 500's top 15 gainers were DaVita HealthCare Partners Inc., Cigna Corp., WellPoint Inc. and Aetna Inc.
Among health insurance companies, UnitedHealth rose $3.41, or 6 percent, to $62.38. Humana gained $5.48, or 7 percent, to $80.50. DaVita HealthCare Partners rose $7.14, or 6 percent, to $127.05. Cigna added $2.53, or 4 percent, to $65.44. WellPoint increased $1.98, or 3 percent, to $69.42. Aetna rose $2.18, or 4 percent, to $54.56.
Some other companies making big moves:
— Hewlett-Packard plunged after a Goldman Sachs analyst downgraded the stock, predicting the company's earnings will be weak. Shares fell $1.42, or 6 percent, to $21.89.
— Urban Outfitters climbed a day after the clothing and accessories company said sales at stores open at least a year have grown in the high single digits in the first two months of the fiscal quarter started Feb. 1. Sales at stores open at least a year is a key gauge of a retailer's health because it excludes results from stores recently opened or closed. The stock rose $1.48, or 4 percent, to $39.89.
— Actavis Inc. rose after a U.S. court declared a rival's patent invalid, clearing the way for Actavis to sell a generic asthma inhaler. The stock added $4, or 4 percent, to $96.46.
Daniel Wagner can be reached at www.twitter.com/wagnerreports.