* Initial jobless claims fall more than expected
* All 10 S&P 500 sectors higher, financials leading gains
* Pioneer Natural Resources jumps after results
* Indexes up: Dow 0.8 pct, S&P 1 pct, Nasdaq 1 pct
By Alison Griswold
NEW YORK, Aug 1 (Reuters) - U.S. stocks climbed on Thursday,
with the S&P 500 topping the 1,700 level for the first time,
after economic data pointed to a modestly improving economy and
the Federal Reserve kept its loose money policy in place.
In its latest policy statement on Wednesday, the Federal
Reserve gave no hint that a reduction in the pace of its
bond-buying program was imminent, as the economy continues to
recover but is still in need of support.
Global central banks on Thursday also remained accommodative
with the European Central Bank's President Mario Draghi
reiterating the ECB's rates will remain at their present level
or lower for an "extended period" of time.
Data on weekly U.S. initial jobless claims and national
manufacturing came in better than expected, while construction
spending dropped 0.6 percent in June, below forecasts calling
for a 0.4 percent rise.
"There is an ongoing recovery in the economy," said Leo
Kelly, managing director and partner at HighTower's Kelly Wealth
Management in Hunt Valley, Maryland.
"It is not an economy that's growing at a break-neck pace,
but it's an economy that continues to move forward and that's
why you're seeing stocks react positively today."
The market's advance was broad, with all of the 10 S&P 500
industry sectors moving higher. Growth-sensitive financials,
industrials and consumer discretionary shares registered the
Bank of America and Wells Fargo were among
the companies giving the greatest boost to the S&P 500. Shares
of Bank of America rose 2.3 percent to $14.93, while Wells Fargo
added 1.8 percent to $44.30.
The Dow Jones Industrial Average gained 125.40
points, or 0.81 percent, to 15,624.94. The Standard & Poor's 500
Index climbed 16.82 points, or 1.00 percent, to 1,702.55,
and the Nasdaq Composite Index rose 36.80 points, or
1.01 percent, to 3,663.17.
Earlier in the session, the benchmark S&P rose to a new
intraday high of 1,704.97.
Yelp Inc surged 23.2 percent to $51.47 after the
consumer reviews website posted a smaller-than-expected
quarterly loss and forecast third-quarter revenue above
Pioneer Natural Resources was the S&P 500's biggest
percentage gainer after reporting its second-quarter results.
The company's shares jumped 13.3 percent to $175.32, after
hitting an all-time high of $180.99 earlier in the session.
On the downside, Exxon Mobil Corp dipped 2.2 percent
to $91.70, the biggest drag on the Dow and the S&P 500, after
reporting a sharp drop in quarterly profit on lower oil and gas
output production and weaker earnings from its refining
Of the 375 companies in the S&P 500 that have reported
earnings for the second quarter, 67.5 percent have topped
analyst expectations, in line with the average beat over the
past four quarters. About 55 percent have reported revenue above
estimates, above the average beat of the past four quarters but
below the historical average.
Weekly initial jobless claims data showed a drop of 19,000
to a seasonally-adjusted 326,000, the lowest since January 2008
and better than the 345,000 forecast.
The drop in initial claims, coupled with Wednesday's
better-than-expected ADP employment report, bodes well for
payrolls data on Friday.
The Institute for Supply Management said its index of
national factory activity rose to 55.4 in July, its highest
level since June 2011.
Financial data firm Markit said its final U.S. Manufacturing
Purchasing Managers Index for July rose to 53.7, the highest