Dow up 47 to close over 7,300

NEW YORK - Stocks posted a late advance today, boosting the Dow Jones industrial average and other market measures to new highs, as investors wrestled with conflicting signals on inflation and interest rates.

The Dow rose 47.39 to close at 7,333.55, beating Monday's record finish at 7,292.75 and closing above 7,300 for the first time. The blue-chip barometer had opened the day with a 32-point loss before recovering and trading nearly unchanged until the last half hour.

Also setting new highs were the Standard & Poor's 500-stock list, up 5.84 to 841.88, and the New York Stock Exchange composite index, up 2.05 to 437.65.

The Nasdaq composite index rose 18.07 to 1,353.62, and the American Stock Exchange composite index rose 1.50 to 583.47.

Advancers beat decliners by a 10-to-9 margin on the NYSE, with 1,307 up, 1,188 down and 860 unchanged. NYSE volume totaled 458.14 million shares vs. 498.77 million yesterday.

Stocks were pressured at the open by a weak bond market, where long-term interest rates briefly shot toward unsettling levels amid some signs that inflationary pressures remain a concern.

But bonds rebounded later in the morning after two subsequent reports indicated that manufacturing activity is slowing.

Before bonds recovered, the yield on the 30-year Treasury bond - a key determinant of corporate and consumer borrowing costs - rose as high as 6.95 percent. By late afternoon, the long-bond yield had fallen slightly below late yesterday's 6.88 percent.

The Labor Department reported that consumer prices, excluding the volatile food and energy sectors, rose 0.3 percent in April, slightly more than expected and the largest increase since September.

And in a separate reading that indicated continued upward pressure on employment costs - a key force behind inflation - the Labor Department also reported that first-time claims for unemployment benefits fell a bigger-than-anticipated 31,000 last week to 319,000, a three-week low.

The two reports countered some recent signs that economic activity may be slowing enough to keep a lid on inflationary pressures without another increase in interest rates by the Federal Reserve. The Fed's policy makers, who in late March boosted one of the central bank's short-term lending rates, are scheduled to meet again on Tuesday.

In one report, the Federal Reserve reported that American industry was operating at 83.4 percent of its capacity in April, down from 83.7 percent in March. It was the lowest operating rate in three months and an indication that consumer demand isn't creating inflationary bottlenecks in the production pipeline.