Kate Gibson
MarketWatch

NEW YORK: Stocks surged for a third session on Thursday on upbeat economic data and reiterations from Federal Reserve officials that monetary policy depends on the economic outlook.

“The interesting thing is we can have some decent economic numbers and the market doesn’t head to the cellar, given the usual worry about the Fed turning the spigot off,” said Bruce McCain, chief investment strategist at Key Private Bank.

The day’s trading leaves markets on track for Wall Street’s first up week in three and first monthly drop this year. Stocks retreated in recent weeks after Fed Chairman Ben Bernanke told Congress on May 22 that the central bank could curb its bond purchases as long as the economy continues to improve.

The S&P 500 index on Thursday remained about 55 points from its record closing high hit on May 21, and ended up 9.94 points, or 0.6 percent, at 1,613.20.

“We’re setting up for a little better third quarter — maybe not gangbusters, but as long as we don’t lose Uncle Ben’s help, that would argue for some decent market action,” said McCain at Key Private Bank.

Making its 15th triple-digit move for June, the Dow Jones industrial average rallied 114.35 points, or 0.8 percent, at 15,024.49.

“Volatility has picked up, but that’s probably a good sign, because it was abnormally suppressed,” said McCain.

Hewlett-Packard Co. and Boeing Co. paced the gains among the blue-chip index’s 30 components.

The Nasdaq composite climbed 25.64 points, or 0.8 percent, to 3,401.86.

The U.S. dollar mostly held steady against other global currencies, but rose against the Japanese yen.

Bond yields declined for a second day, moderating concerns that an abrupt rise in interest rates might harm the housing market and the economy. The yield on the 10-year note used in determining mortgages and other consumer loans fell to 2.48 percent. The yield on Monday rose to 2.66 percent, its highest level since August 2011.

Gold futures on Thursday lost $18.20, or 1.5 percent, to close at $1,211.60 an ounce on the New York Mercantile Exchange.

The price of oil climbed for a fourth day, with futures for August delivery adding $1.55, or 1.6 percent, to finish at $97.05 a barrel on the Nymex.

Corporate news had ConAgra Foods Inc.’s shares rising 5.1 percent after the food producer reported a quarterly profit above expectations and raised its long-term forecast.

Paychex Inc. lost 3.7 percent after the payrolls processor reported earnings below market expectations.

The head of the last U.S. agency reviewing SoftBank Corp.’s bid for control of mobile carrier Sprint Nextel Corp. recommended approval of the $21.6 billion deal.

In a speech Thursday, Federal Reserve Bank of New York President William Dudley played down the possibility that rate increases are in the cards anytime soon.

Atlanta Fed President Dennis Lockhart also spoke, saying the markets had mistaken Bernanke’s framework for tapering central-bank asset purchases, and reiterated the Fed’s approach would be flexible, and based on economic conditions.

On Wednesday, Fed Bank of Richmond President Jeffrey Lacker said he believes the economic recovery will remain lackluster for a few more years.

Stock-index futures had added to gains after the Commerce Department reported Thursday that household purchases rose 0.3 percent in May and wages advanced 0.5 percent.

Separately, the U.S. Department of Labor reported the number of Americans filing for state unemployment benefits fell by 9,000 to 346,000 last week. And the National Association of Realtors reported pending home sales jumped to a six-year high in May.