Rally adds to strong week

A broad rally on Wall Street Thursday added to the market's solid gains this week and pushed the S&P 500 and Nasdaq composite to all- time highs.

Strong company earnings and optimism that Washington can reach a deal for another round of fiscal stimulus for millions of Americans who need it has kept investors in a buying mood this week. The S&P 500 rose 1.1%, eclipsing the benchmark index's last record high set early last week. The three major stock indexes are on track for weekly gains above 3%, an encouraging start to February after a late fade in January.

Financial and technology companies lead the way higher. Smallcompany stocks also had a strong showing, another bullish signal that investors are feeling more optimistic about the economy.

“The path of least resistance seems to be higher,” said Brian Price, head of investment management for Commonwealth Financial Network. “We had a few minor pullbacks since the start of the year, but it really seems an extension of what we saw in the fourth quarter where it seems the market is anticipating lockdowns ending, people going back to work and economies broadly opening.”

The S&P 500 index rose 41.57 points to 3,871.74. It was the index's fourthstraight gain. The Dow Jones industrial average picked up 332.26 points, or 1.1%, to 31,055.86. The technology-heavy Nasdaq gained 167.20 points, or 1.2%, to 13,777.74, also an all-time high. The Russell 2000 index of smaller company stocks climbed 42.72 points, or 2%, to 2,202.42.

Volatility spiked last month amid worries about the timing and scope of another round of stimulus spending by the Biden administration and unease over the effectiveness of the government's coronavirus vaccine distribution. A wave of selling left the S&P 500 down 3.3% for the week.

Stocks have shaken off those concerns. So far this week, the S&P 500 is up 4.2%, more than making up for its pullback last week.

“There are a lot of reasons to be optimistic and, obviously, there's a tremendous amount of stimulus in the system with talks of more,” Price said.

Wall Street continues to be focused on individual company earnings. Shares of eBay rose 5.3% and PayPal climbed 7.4% after both companies reported results that blew away Wall Street's expectations.

“We're really impressed with how corporate America has come through earnings season so far,” said Jeff Buchbinder, equity strategist at LPL Financial.

The performance so far is a surprising and welcome about- face from early projections for weak profits.

Tech companies are doing particularly well, but financial and smaller companies are also releasing surprisingly good results, he said.