Consumer activity gives market a lift
NEW YORK » Stocks climbed for the third straight day yesterday as an already buoyant Wall Street embraced robust consumer spending figures and largely overcame disappointment in Google Inc.'s profit report.
Both the Dow Jones industrials and the Russell 2000 index of smaller companies closed at new highs.
The gains followed Wall Street's best day of the year on Wednesday, when it advanced sharply after the Federal Reserve signaled that the economy remained solid and that inflation was mostly in check.
The central bank's comments, which followed its decision to leave short-term interest rates unchanged, injected a bit of confidence into an uncertain market.
Economic data continued to play a big role in trading, as it has all week. As expected, consumer spending in December showed its biggest increase in five months, rising 0.7 percent.
"It seems to me the Fed is on hold for the foreseeable future and stocks are taking solace in that," said Brian Levitt, corporate economist for OppenheimerFunds Inc.
The Dow Jones industrial average advanced 51.99, or 0.41 percent, to 12,673.68. The session saw the blue chip average's 27th record close since the start of October, coming in well above the record of 12,621.77 set little more than a week ago, on Jan. 24. A new trading high of 12,682.57 topped a day-old record of 12,657.02.
Broader stock indicators also showed strong gains. The Standard & Poor's 500 index rose 7.70, or 0.54 percent, to 1,445.94, and the Nasdaq composite index was up 4.45, or 0.18 percent, at 2,468.38.
The Russell 2000 rose 7.43, or 0.93 percent, to 807.77. The index first broke the 800 mark on Wednesday.
Advancing issues outnumbered decliners by about 3 to 1 on the New York Stock Exchange, where consolidated volume came to 2.91 billion shares, compared with 2.96 billion Wednesday.
Bond prices fell as stocks carved their gains on fresh economic data, with the yield on the benchmark 10-year Treasury note rising to 4.83 percent from 4.82 percent late Wednesday. The dollar was mixed against other major currencies, while gold prices rose.
Light sweet crude settled down 84 cents at $57.30 per barrel on the New York Mercantile Exchange.
In other economic news, the U.S. Labor Department reported the number of newly laid off workers seeking unemployment benefits fell by 20,000 last week to 307,000.
The figure pushed the four-week average for claims to the lowest level in a year.
The reading also bolstered investor confidence for the department's January unemployment report, which is due today.