Dow has best close in more than a month
Wall Street extended its advance to a second session today in a late-surge of buying, despite disappointing economic news and profit-taking following the market's huge rally.
The Dow Jones industrials had their best close in more than five weeks.
The gains came gradually, however, and only solidified in the final hour of trading. Analysts said investors, still wary after two years of bear markets, remained hesitant about making many big moves.
The Dow closed up 74.83, or 0.9%, at 8,818.14, for a two-day advance of 335.75. It was the average's highest close since July 9, when it stood at 9,096.09.
Broader stock indicators also rose. The Standard & Poor's 500 index advanced 10.62, or 1.2%, to 930.24, while the Nasdaq composite index gained 10.63, or 0.8%, to 1,344.93.
The advance came a day after a sizable rally on news that most of the US's largest companies had complied with the Securities and Exchange Commission order to certify their financial statements by Wednesday.
Analysts said investors had been reassured by the relative ease of the process, but they were hesitant to ascribe too much to the market's two-day winning streak. They said that although investor sentiment has improved from a few months ago when it seemed like there was a new corporate scandal every day, market conditions remain fragile.
The Labour Department reported today that new claims for jobless benefits rose last week by a seasonally adjusted 6,000 to 388,000, a bigger-than-expected gain. Economists expect the jobless rate to move higher later this year as cautious employers delay taking on new staff.
A Federal Reserve study found that the US industrial sector lagged in July, with production increasing by 0.2% - a slowdown from the brisk 0.7% increase posted in June.
A regional survey of Philadelphia from the Federal Reserve further discouraged investors, because it showed a significant drop in spending and manufacturing activity.
"There's little doubt there is economic weakness," said Barry Hyman, chief investment strategist at Ehrenkrantz King Nussbaum. "The only unknown is if this is going to turn into a double-dip recession. There's no answer to that yet."
But investors did feel confident enough about the market's prospects to do some selective buying.
Target advanced dlrs 2.93, or 9.1%, to dlrs 35.10 following a 27% increase in second-quarter earnings. Clothing retailer Nordstrom surged dlrs 2.18, or 11.8%, to dlrs 20.62 on better-than-expected quarterly results.
Brocade Communications was also higher, climbing 91 cents to dlrs 15.96, after reporting growth in quarterly profits and sales and expressing confidence about the current quarter.
Even firms with seemingly negative news scratched out gains.
AOL Time Warner advanced 81 cents to dlrs 11.86 despite the media conglomerate's announcement that there may be problems with the way its America Online unit recognised revenues from at least three transactions.
And UAL Corp, the parent of United Airlines, rose 25 cents to dlrs 2.70 despite a warning that a bankruptcy filing later this year might be possible.
Advancing issues led decliners more than 2 to 1 on the New York Stock Exchange. Volume totalled 1.19 billion shares, compared with 1.09 billion at the same point on Wednesday.
The Russell 2000 index of smaller companies rose 1.32 to 390.73.
