By Kate Gibson

Buoyed by earnings that are proving better than dire forecasts, U.S. stocks on Thursday marked solid April gains, with the Standard & Poor's 500 index posting one of its strongest months in years.

"The earnings season in general has been better than expected, with 68% of the S&P 500 reporting upside surprises, and we're three-quarters of the way done," said Art Hogan, chief market strategist, Jefferies & Co.

"A lot of the upside surprises have come from financials, and there, we were pretty gloomy coming into it," Hogan added.

By Thursday's close, stocks had largely lost their grip on an early rally, with the Dow Jones Industrial Average (DJI) ending at 8,168.12, off 17.61 points, or 0.2%, and leaving the blue-chip index with a 7.3% April rise. The S&P 500 Index (SPX) fell fractionally, or 0.1% to 872.81, translating into a 9.4% climb for the month, its best monthly rise since March 2000 And the Nasdaq Composite (RIXF) gained 5.36 points, or 0.3%, to stand at 1,717.30, up 12.3% from its March 31 close.

"With the strong two-month breadth, half the index issues are now in positive territory for the year-to-date, an event not seen since the 2009 opening day on Jan. 2, when the index was up 3.14%. Financials are up 74% from the March 9th low, but still 70% down from the October 2007 high," said Howard Silverblatt, senior index analyst at Standard & Poor's.

The energy sector was hit as Exxon Mobil Corp. (XOM), reported first-quarter profits that fell below expectations, with shares of the oil giant slipping 2.6%. .

Sector action

Materials and consumer discretionary shares fronted gains, with those sectors fueled by results from companies including Newell Rubbermaid Inc. (NWL). Its shares surged 20% after the maker of plastic storage containers said its first-quarter profit declined 41%, but still beat expectations.

The S&P 500's finish made April 2009 "one of the best months for the S&P in the post-war era," said Dan Greenhaus, an analyst with Miller Tabak & Co., in a note.

The index placed in the middle of the index's top 20 monthly gains since 1950.

Topping the list is October 1974, when the S&P 500 advanced 16.3%. The following month, the index declined 5.3%, but it was 20.5% ahead one year later, Greenhaus said.

"While the best 20 post-war months for the S&P saw gains of 11.79% in the year following, April 2009 is on the verge of being one of the top 10 months the average gain after those 10 months has been more than 13%. There is, of course, no guarantee, but both March and April 2009 would rank among the top months for the S&P and 85% of the time the index is higher one year later," said Greenhaus.

Historical trends bode well for the U.S. stock market in looking 10 to 12 months ahead, yet Greenhaus also cautions the shorter-term picture remains a choppy one, given "low earnings visibility, macroeconomic uncertainty and a volatile political environment."

Another market observer noted the stock market often climbs a wall of worry and agreed that there remains plenty to be concerned about, including unemployment, most recently at 8.5%, which many expect will eventually climb to more than 10%.

"Some of the strongest and most enduring rallies in the stock market's history have come in the face of very dour circumstances," said Michael Farr, president of investment management firm Farr, Miller & Washington LLC.