Gains for banks and materials lead stocks to all-time highs

NEW YORK (AP) - After a quiet start, major U.S. stock indexes set more all-time highs Thursday afternoon as the market built on a surge the previous day. Banks are rising as bond yields increase, and basic materials and technology companies are also climbing. Defense contractors and other industrial companies are taking modest losses.

KEEPING SCORE: The Dow Jones industrial average climbed 79 points, or 0.4 percent, to 19,628 as of 3:10 p.m. Eastern time. The Standard & Poor's 500 index picked up 4 points, or 0.2 percent, to 2,245. The Nasdaq composite gained 16 points, or 0.3 percent, to 5,409, on pace for a record close. Small-company stocks continued to outpace the blue chips, and the Russell 2000 index of small-company stocks jumped 17 points, or 1.3 percent, to 1,381.

BIG GAINERS: Makers of basic materials and technology companies also booked large gains. Chemicals maker DuPont added 99 cents, or 1.3 percent, to $74.81 and Albemarle rose $3.20, or 3.6 percent, to $91. Specialty glass maker Corning, which said it will buy back as much as $4 billion worth of stock, jumped 31 cents, or 1.3 percent, to $24.90 while eBay picked up 52 cents, or 1.8 percent, to $29.43.

EURO STIMULUS: The European Central Bank surprised investors by saying it will reduce the size of its monthly bond purchases. The ECB extended its economic stimulus program, as expected, but will start spending less on bonds starting in March. European government bond prices fell and yields rose.

While the ECB said it's not getting ready to phase out its stimulus program, John Canally, an investment strategist for LPL Financial, said investors are starting to think about the time when the ECB will gradually stop buying bonds and will start raising interest rates in response to a healthier economy.

"(It's) a big 180 from where we were a couple of months ago, where the market was pricing in negative rates for a long period of time," he said.

The ECB will still spend $600 billion on bond purchases through the end of 2017.

BOND BOOST: U.S. government bond prices fell, sending yields higher. The yield on the 10-year Treasury note rose to 2.39 percent from 2.34 percent. That drove banks stocks up since higher interest rates will allow banks to charge more for lending money. Goldman Sachs, which has surged 32 percent since the presidential election and is trading at a nine-year high, rose $4.72, or 2 percent, to $240.28 and Bank of America picked up 39 cents, or 1.7 percent, to $22.96.

DEFENSE DOWN: Lockheed Martin fell $6.45, or 2.4 percent, to $259.938 and Northrop Grumman lost $10, or 4 percent, to $237.14. Machinery makers and railroad companies also traded lower.

LOSS OF APPETITE: Companies that sell consumer goods like snacks also slipped. Oreo maker Mondelez fell 65 cents, or 1.5 percent, to $41.29 and Kraft Heinz gave up 90 cents, or 1.1 percent, to $82.05.

OIL: Benchmark U.S. crude rose $1.07, or 2.1 percent, to $50.84 per barrel in New York. Brent crude, the international standard, added 89 cents, or 1.7 percent, to $53.89 a barrel in London.

LEMON AID: Athletic apparel maker Lululemon raised its annual profit forecast after its third-quarter results came in above Wall Street projections. Its stock jumped $9.45, or 15.8 percent, to $69.29.

SNAPPY DRESSERS: Tailored Brands, the parent of Men's Wearhouse, soared after the company said it made progress in improving the performance of its struggling Jos. A. Bank business. The company reported strong quarterly results and jumped $7.46, or 39.4 percent, to $26.39. A year and a half ago it was trading around $60, but it has tumbled the company tried to reduce Jos. A. Bank's dependence on discounts.

JOIN THE CLUB: Warehouse club operator Costco reported a mixed quarter, but Wall Street found some encouraging trends in its business and shares recovered some of their recent losses. Kelly Bania of BMO Capital Markets said the company might raise membership fees to deal with weaker sales, while Edward Kelly of Credit Suisse said the company's growth should get stronger thanks to a new credit card and continued consumer spending.

Costco stock rose $3.98, or 2.6 percent, to $157.83. It traded at an all-time high of almost $170 this summer.

CURRENCIES: The dollar rose to 114.20 yen from 113.85 yen. The euro slipped to $1.0603 from $1.0759.

OTHER ENERGY TRADING: Wholesale gasoline was little changed at $1.50 a gallon. Heating oil gained 1 cent to $1.63 a gallon. Natural gas jumped 9 cents, or 2.6 percent, to $3.70 per 1,000 cubic feet.

METALS: Gold lost $5.10 to $1,172.40 an ounce. Silver fell 18 cents to $17.10 an ounce. Copper slid 2 cents to $2.63 a pound.

OVERSEAS: European stocks climbed for the second day in a row. Germany's DAX jumped 1.7 percent and French CAC 40 added 0.9 percent. The FTSE 100 in Britain rose 0.4 percent. Japan's Nikkei 225 surged 1.5 percent and the Kospi in South Korea jumped 2 percent. Hong Kong's Hang Seng index gained 0.3 percent.

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AP Markets Writer Marley Jay can be reached at http://twitter.com/MarleyJayAP His work can be found at http://bigstory.ap.org/journalist/marley-jay