Stocks rise on sign of pickup in hiring

The Dow pushed further into record territory Thursday, having surpassed its previous all-time high two days ago. The catalyst was the latest evidence that hiring is picking up.

Stocks started higher after the Labor Department reported that the number of Americans seeking unemployment aid fell 7,000 last week, driving the four-week average to its lowest level in five years. The drop is a positive sign ahead of Friday’s employment report.

The Dow Jones industrial average rose 33.25 points, or 0.2%, to 14,329.49. The Standard & Poor’s 500 index gained 2.80 points, or 0.2%, to 1,544.26. Both indexes rose for the fifth straight session.

The Dow barreled through a record high Tuesday and has added to its gains since then. The S&P 500 is also closing in on its own record high of 1,565, reached on Oct. 9, 2007, the same day of the Dow’s previous peak. The S&P 500 would need to rise 21 points, or 1.3%, to set a record.

Investors have been buying stocks on optimism that employers are slowly starting to hire again and that the housing market is recovering. Growing company earnings are also encouraging investors to get into the market. The Dow is 9.4% higher this year and the broader S&P 500 is up 8.3%.

“If you have a multiyear time horizon, equities are an attractive asset, but don’t be surprised to see some volatility, especially after the big run we’ve had,” said Michael Sheldon of RDM Financial Group.

Boeing gained Thursday, advancing $1.97, or 2.5%, to $81.05 after reports that U.S. regulators were poised to approve a plan within days to allow the plane maker to begin test f lights of its 787 Dreamliner. The 787 f leet has been grounded since Jan. 16 because of safety concerns about the plane’s batteries.

The Federal Reserve’s stress tests for the nation’s 18 largest banks, released af- ter the markets closed, showed all but one could withstand a severe recession. Financial stocks advanced amid speculation that banks will have amassed enough capital to be able to return more cash to shareholders. Bank of America Corp. had the largest percentage gain in the Dow, rising 34 cents, or 2.9%, to $12.26, with JPMorgan Chase & Co. in the third spot, gaining 60 cents, or 1.2%, to $50.63.

Jeffrey Saut, chief investment strategist at Raymond James, predicted that any sell-off in stocks may be short-lived as investors who have missed out on the rally since the start of the year jump into the market.

“The rally is going to go higher than most people think,” Saut said. “This thing has caught most money managers flat-footed.”

The stock market’s rally this year has been helped by continuing economic stimulus from the Federal Reserve. The U.S. central bank began buying bonds in January 2009 and is still purchasing $85 billion each month in Treasury bonds and mortgage-backed securities. That has kept interest rates near historic lows, reducing borrowing costs and encouraging investors to move money out of conservative investments such as bonds and into stocks.