Market extends big July rally

Market extends big July rally

NEW YORK (AP) — 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 84 points, and the Nasdaq composite index traded above 2,000 (in the morning) for the first time since October. It settled at 1,984.30.

The latest reports struck on a theme that has played out for weeks: Times are tough, but companies aren’t doing as badly as had been 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. A much-anticipated report on the overall output of the economy is sure to drive the market’s direction today.