The stock market is a day away from locking in its best July in 20 years.
Stocks added to an already impressive run Thursday as another round of earnings reports gave investors new reasons to be optimistic about the economy. The Dow Jones industrial average rose its highest level in nearly nine months with a gain of 84 points and the Nasdaq composite index traded above 2,000 for the first time since October.
The latest reports struck a theme that has played out for weeks: Times are tough but companies aren't doing as badly as feared. Many have chopped costs to produce profits well beyond the market's modest expectations.
Motorola Inc. said it used deep cost cuts to wring a profit from its latest quarter. Analysts had expected a loss. Goodyear Tire & Rubber's shortfall was half what had been expected and Dow Chemical Co.'s CEO said he believes the U.S. economy "has found bottom."
A surprise drop in the number of people continuing to seek unemployment benefits gave investors even more reason to put money into stocks.
With one day to go, the Dow is up 8.4 percent this month, its strongest July since 1989, when it gained 9 percent. It would be the best performance of any month since October 2002.
A much-anticipated report on the overall output of the economy is sure to drive the market Friday. Economists expect that the nation's gross domestic product shrank at an annual rate of 1.5 percent in the April-June quarter. That would be a big improvement from the 5.9 percent average annualized drop recorded in the prior six months, the weakest numbers in 50 years.
Stocks are up 13 percent since July 13 when investors bet correctly that Goldman Sachs Group Inc. would report enormous earnings. Since then, other profit reports have brought hope that the longest recession since World War II might end this year. AT&T Inc., chip maker Intel Corp. and heavy equipment maker Caterpillar Inc. all posted results that outran expectations.