U.S. stocks rose sharply on Thursday, driving the Dow and S&P 500 to new 18-month highs as Qualcomm and Best Buy boosted their profit outlooks and financials surged for a second day.

Citigroup Inc gained 3.6 percent to $4.30 after Bloomberg News reported that the U.S. Treasury could unveil a plan next month for the sale of its stake in the bank.

Wireless chip maker Qualcomm Inc led the Nasdaq, surging 5.2 percent to $42.27 after raising its second-quarter earnings outlook.

Electronics retailer Best Buy Co forecast stronger-than-expected earnings for the current year and reported quarterly results that were above estimates, pushing

its shares up 4.7 percent to $43.10.

Today is all about earnings, and the comments from Qualcomm and Best Buy have been very positive, said James Meyer, chief investment officer at Tower Bridge Advisers in West Conshohocken, Pennsylvania.

The economic backdrop for the upcoming earnings season looks very good, particularly in the tech sector.

The Dow Jones industrial average <.DJI> was up 64.01 points, or 0.59 percent, at 10,900.16. The Standard & Poor's 500 Index <.SPX> was up 4.86 points, or 0.42 percent, at 1,172.58. The Nasdaq Composite Index <.IXIC> was up 14.53 points, or 0.61 percent, at 2,413.29.

First-quarter S&P 500 earnings reports, due in the coming weeks, are forecast to show year-over-year gains of 36.6 percent, according to estimates compiled by Thomson Reuters.

Also lifting the Nasdaq was Oracle Corp , up 1.2 percent at $26.07 ahead of its results, which are scheduled to come out after Thursday's closing bell.

Other financial shares on the rise included Bank of America , up 2.6 percent at $18.03. It was the second day of strong gains for the bank, which on Wednesday said it plans to offer about $3 billion in loan forgiveness to about 45,000 troubled home buyers.

The S&P financial index <.GSPF> was up 1.3 percent on the day and is up about 11 percent for the month so far.

Adding to the positive tone, data showed the number of U.S. workers filing new applications for unemployment insurance fell sharply last week.

(Editing by Jan Paschal)

Pennsylvania Qualcomm