NEW YORK (AP) -- After a quiet start, major U.S. stock indexes again set all-time highs Thursday afternoon as the market built on a surge the previous day. Banks continued to lead the way as bond yields jumped, and small-company stocks soared again.
Bond yields in the U.S. and Europe, particularly in heavily indebted countries, jumped after the European Central Bank surprised investors by saying it will reduce the size of its monthly bond purchases. That sent interest rates higher, which makes it more profitable for banks to lend money.
Energy companies rose with the price of oil and companies that make chemicals and other basic materials also climbed. Industrial companies and makers of household goods slipped, which held stocks back from even larger gains.
"Bond yields are creeping higher as these central banks are easing off the pedal a bit," said John Canally, an investment strategist for LPL Financial.
The Dow Jones industrial average climbed 65.19 points, or 0.3 percent, to 19,614.81. It rose as much as 115 points around 2 p.m. The Standard & Poor's 500 index picked up 4.84 points, or 0.2 percent, to 2,246.19.
The Nasdaq composite had lagged behind the other major indexes over the last two weeks, but it rebounded along with technology companies and rose 23.59 points, or 0.4 percent, to 5,417.36.
The Russell 2000 index of small-company stocks jumped 21.87 points, or 1.6 percent, to 1,386.37.
The European Central extended its bond-buying economic stimulus program, as investors expected. It will spend about $579 billion through the end of 2017. But starting in March it will begin spending less on bonds.
While the bank said it's not getting ready to phase out its stimulus program, Canally, of 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. Government bond prices in Spain, Italy and Portugal fell, and yields rose sharply.
U.S. government bond prices also fell. The yield on the 10-year Treasury note rose to 2.41 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 33 percent since the presidential election and is trading near its all-time high, rose $5.89, or 2.5 percent, to $241.45 and Bank of America picked up 38 cents, or 1.7 percent, to $22.95.
European stocks climbed for the second day in a row. Germany's DAX jumped 1.8 percent and French CAC 40 added 0.9 percent. The FTSE 100 in Britain rose 0.4 percent.
Specialty chemicals maker DuPont helped lead materials companies higher as it added 86 cents, or 1.2 percent, to $74.68. Competitor Albemarle gained $3, or 3.4 percent, to $91.80.
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.
CVS Health, a drugstore operator and pharmacy benefits manager, dropped $2.42, or 3 percent, to $78.11 as retailers of household goods weakened. Church & Dwight fell $1.09, or 2.4 percent, to $43.79 and Mondelez, the maker of Oreos and other snack foods, fell 61 cents, or 1.5 percent, to $41.33.
Athletic apparel maker Lululemon raised its annual profit forecast after its third-quarter results came in above Wall Street projections. Its stock jumped $9, or 15 percent, to $68.84.
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 $7.51, or 39.7 percent, to $26.44. 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.
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 rose $3.74, or 2.4 percent, to $157.59.
In 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.
The dollar rose to 114.20 yen from 113.85 yen. The euro slipped to $1.0603 from $1.0759.
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.
In Asia, 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.