By Ryan Vlastelica

Red Hat falls after results

U.S. stocks rallied on Thursday, with both the Dow and the S&P 500 climbing to record levels as the market's uptrend continued on the back of strong economic data, which overshadowed escalating U.S.-China trade tensions.

Where are the major benchmarks trading?

The Dow Jones Industrial Average rose 213 points, or 0.8%, to 26,623, hitting an all-time high in early trading. The record is the Dow's first since January, and it puts an end to the blue-chip average's longest streak without a record since a stretch that occurred between May 2015 and July 2016, according to the Dow Jones Data Group.

All but two of the Dow's 30 components were in positive territory. Leading the move higher was Caterpillar Inc., which rose 3%, and both Boeing Co. and 3M Co., which each gained 1.3%. The move extended the recent outperformance of industrial stocks, one of the strongest-performing sectors thus far this quarter.

See also:Not just tech: The stock-market rally is broader than it's given credit for (http://www.marketwatch.com/story/not-just-tech-the-stock-market-rally-is-broader-than-its-given-credit-for-2018-09-19)

The S&P advanced 15 points, or 0.5%, to 2,923, hitting a record of its own, for the first time since late August. Nine of the 11 primary S&P 500 sectors were higher on the day, with the only decliners -- utilities and real estate -- considered defensive parts of the market that do better in periods of economic uncertainty.

The Dow is on track for its seventh gain of the past eight sessions, with the S&P has risen in eight of the past nine.

The Nasdaq Composite Index rose 39 points, or 0.5%, to 7,992. The tech-heavy index is 1.7% below record levels.

Read about how recent trading on Wall Street has been quiet and lacking in volatility (http://www.marketwatch.com/story/what-trade-fears-us-stock-investors-are-extremely-calm-2018-09-18)

What's driving markets?

Recent market gains have come on signs of improving fundamentals. In the latest economic data, first-time jobless claims fell by 3,000 last week, dropping to their lowest level since November 1969 (http://www.marketwatch.com/story/jobless-claims-fall-again-to-fresh-49-year-low-of-201000-2018-09-20). Separately, the Philadelphia Fed manufacturing index jumped more than expected in September (http://www.marketwatch.com/story/philly-fed-manufacturing-index-rebounds-in-september-2018-09-20), rising to 22.9 from 11.9 in the previous month.

Such reports have helped to overshadow ongoing uncertainty surrounding trade policy.

Among recent developments, President Donald Trump earlier this week reiterated his hard-line stance on China and said the U.S. had "no choice" but to levy another $267 billion in duties on China. That would come on top of announced tariffs on about $200 billion in Chinese goods announced late Monday. China responded with tariffs of 5% to 10% on $60 billion worth of U.S. products that will take effect Sept. 24, and said it may introduce more measures if the U.S. goes ahead with higher tariffs.

While many are concerned that a full-blown trade war will become a huge headwind to global economic growth, investors have repeatedly shrugged off the issue over the past several months, choosing instead to focus on signs of improving economic fundamentals.

Read:How trade-war fears have become less of a factor for stock-market investors (http://www.marketwatch.com/story/how-trade-war-fears-have-become-less-of-a-factor-for-stock-market-investors-2018-09-18)

Trump on Thursday also tweeted over his displeasure with the Organization of the Petroleum Exporting Countries, or OPEC, over rising oil prices.

Read:Trump blasts OPEC on oil prices, says cartel 'must get prices down now!' (http://www.marketwatch.com/story/trump-blasts-opec-on-oil-prices-says-monopoly-must-get-prices-down-now-2018-09-20)

What are market analysts saying?

"Fundamentally and technically, the market is really strong right now. Corporate earnings have been good, and economic data has been really good. At the same time, there's a sense that China's most recent trade retaliation wasn't as severe as expected, which led to some optimism and relief that the situation may not turn into a full-blown trade war," said Paul Brigandi, managing director and head of trading for Direxion.

"The tariff situation isn't going away, and it will need to be resolved, but until threats become official policy, the market can ignore it," he said. "Certainly, what we've seen so far hasn't been able to knock the momentum out of the market."

What stocks are in focus?

Shares of Red Hat Inc. (RHT) fell 6.3% a day after it reported revenue that was below expectations (http://www.marketwatch.com/story/red-hat-stock-drops-on-revenue-miss-weak-outlook-2018-09-19) and gave an outlook that was below the analyst consensus.

Broadly speaking, the financial sector (XLF) could continue to attract attention a day after it closed at a multimonth high, a move that coincided with the yield on the 10-year U.S. Treasury note nearing its highest level of the year.

Darden Restaurants Inc. (DRI) jumped 3% after the company beat fiscal first-quarter profit and sales expectations and raised its full-year outlook (http://www.marketwatch.com/story/olive-garden-parent-dardens-stock-jumps-toward-record-after-profit-and-sales-beat-raised-outlook-2018-09-20).

Shares of Galectin Therapeutics Inc. (GALT) jumped 5% after the company commented on a cancer combination drug trial (http://www.marketwatch.com/story/galectin-stock-lifts-15-premarket-on-early-cancer-combination-trial-results-2018-09-20).

Marijuana producer Tilray Inc. will likely remain in focus following an extremely volatile patch of trading (http://www.marketwatch.com/story/why-tilray-stock-is-susceptible-to-wild-price-swings-2018-09-19), which resulted in it being halted five times in less than an hour on Wednesday. The stock has jumped nearly 600% over the course of the past month, making it one of the most high-profile bets in the legal cannabis space. It rose 7.5% in early trading on Thursday.

Mining giant Rio Tinto (RIO.LN) unveiled plans to buy back a swath of its Australia-listed shares (http://www.marketwatch.com/story/rio-tinto-outlines-32-billion-share-buyback-plan-2018-09-20) before the end of the year as part of its move to return about $3.2 billion in proceeds from the sale of coal assets to its shareholders. U.S.-listed shares rose 3.8%.

British regulators said Comcast Corp. (CMCSA) and 21st Century Fox Inc. (FOXA) will settle their takeover battle (http://www.marketwatch.com/story/comcast-fox-to-settle-battle-for-sky-by-auction-2018-09-20) for Sky PLC via an auction starting Friday. Both stocks rose about 0.5%.

Micron Technology Inc. (MU) could be in focus. The chip maker is scheduled to report its quarterly results after the market closes. Shares rose 3.9%.

Read a preview of Micron's earnings (http://www.marketwatch.com/story/micron-earnings-after-a-quarter-of-debate-how-bad-has-the-memory-market-gotten-2018-09-18)

Where are other markets trading?

Asian stocks mostly rose on Thursday, as investors mostly shrugged off the trade tensions with the U.S. Japan's Nikkei rose for a fifth straight session (http://www.marketwatch.com/story/asian-markets-mostly-rise-as-nikkei-eyes-5th-straight-gain-2018-09-19).

Crude-oil prices turned lower (http://www.marketwatch.com/story/us-oil-benchmark-extends-climb-above-2-month-high-2018-09-20) following Trump's OPEC tweet while the price of gold edged higher (http://www.marketwatch.com/story/gold-rises-padding-weekly-advance-as-dollar-index-deepens-september-retreat-2018-09-20). The U.S. dollar index lost 0.3%.

(END) Dow Jones Newswires

September 20, 2018 09:50 ET (13:50 GMT)