The Dow Jones industrial average added 46.98 points to close at 5,528.91, the first closing above 5,500 since the market's big selloff two weeks ago on inflation and corporate profit worries. Advancers led decliners by nearly a 7-to-4 margin on the New York Stock Exchange, with 1,568 up, 881 down and 712 unchanged. NYSE volume totaled 402.59 million shares, vs. 337.31 million yesterday.
Broad-market indexes advanced after a mostly weak start.
The NYSE's composite index rose 2.34 to 342.70; The Standard & Poor's 500-stock index climbed 4.69 to 639.95. The Nasdaq index closed up 8.65 points at 1,080.60, while the American Stock Exchange index rose 2.72 to 539.50.
Bond traders were heartened by this morning's news that a survey of purchasing managers in northern Illinois and northwestern Indiana, one of the nation's largest industrial regions, suggested some moderation in the manufacturing sector's growth.
Investors have been hoping that this week's stream of economic news will be tame enough to allay inflation worries at the Federal Reserve, which has been expected to raise its short-term interest rates to slow spending and ease inflation. As bond prices improved today, the yield on the 30-year Treasury fell below 7 percent. The long-bond yield and the Fed's lending rates are closely watched by investors because they are used to determine the interest charged on many types of loans.