NEW YORK >> 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. Market extends
certification rallyThe Dow industrials have their
best close in more than a month
By Lisa Singhania
Associated PressThe 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.
Advancing issues led decliners more than 2 to 1 on the New York Stock Exchange. Volume came to 1.5 billion shares, compared with 1.51 billion yesterday.
The Dow closed up 74.83, or 0.9 percent, 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 percent, to 930.24, while the Nasdaq composite index gained 10.71, or 0.8 percent, to 1,345.01. The Russell 2000 index rose 1.32 to 390.73.
The price of the Treasury's 10-year note was down 13/32 point today, while its yield rose to 4.17 percent from 4.12 percent late yesterday. Two-year Treasury notes were down 3/32 point and yielded 2.20 percent, up from 2.15 percent yesterday.
The stock market advance came a day after a sizable rally on news that most of the nation's largest companies had complied with the Securities and Exchange Commission order to certify their financial statements by yesterday.
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.
"There is still a very reasonable negative case to be made against equities starting with valuation, continuing on to the risk of a prolonged period of economic softness and the risk that we may even be heading into a deflationary period of time that's typically corrosive to profits," said Charles G. Crane, strategist for Victory SBSF Capital Management.
Indeed, the Labor Department reported today 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 put off new hires.
A Federal Reserve study found that the nation's industrial sector lagged in July, with production increasing by 0.2 percent -- a slowdown from the brisk 0.7 percent increase posted in June.
A regional survey of Philadelphia from the Federal Reserve further discouraged investors, because it showed a significant drop-off in spending and manufacturing activity.
Still, investors felt confident enough about the market's prospects to do some selective buying.
Target advanced $2.93, or 9.1 percent, today to $35.10 on a 27 percent increase in second-quarter earnings. Nordstrom surged $2.18, or 11.8 percent, to $20.62 on better-than-expected quarterly results.
Brocade Communications was also higher, climbing 91 cents to $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 $11.86 despite the media conglomerate's announcement late yesterday that there may be problems with the way its America Online unit recognized revenues from at least three transactions.
And UAL Corp., the parent of United Airlines, rose 25 cents to $2.70 despite a warning that a bankruptcy filing later this year might be possible.
Overseas, Japan's Nikkei stock average rose 1.6 percent. In Europe, Germany's DAX index advanced 2.1 percent, Britain's FTSE 100 climbed 3.8 percent, and France's CAC-40 gained 4.1 percent.