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NEW YORK >> Wall Street got the economic and earnings news it's been so desperate to hear today, and stocks responded by barreling higher, lifting the Dow Jones industrials more than 160 points.
Encouraging consumer spending and income figures and better-than-expected earnings from McDonald's fed the market's rebounding confidence.
"We have had a tough economic situation and earnings have been challenging, but companies have done a good job of cutting costs. And, now it seems like the tide has turned," said Thomas F. Lydon Jr., president of Global Trends Investments in Newport Beach, Calif.
Advancing issues outnumbered decliners 3 to 1 on the New York Stock Exchange. Volume was very light.
The Dow closed up 165.26, or 2 percent, at 8,471.61. having declined 0.4 percent last week. The gain wiped out much of the 209.31 the Dow forfeited last week. And, it was the Dow's biggest advance in more than three weeks, or since April 2 when the blue chips shot up 215.20.
The broader market was also higher for the first time in three sessions. The Nasdaq composite index rose 27.70, or 1.9 percent, to 1,462.24. The Standard & Poor's 500 index advanced 16.03, or 1.8 percent, to 914.84. The Russell 2000 index rose 6.70, or 1.7 percent, to 395.20.
The price of the Treasury's 10-year note was down 1/8 point, while its yield rose to 3.90 percent from 3.89 percent Friday. Two-year Treasury notes were down 1/32 point and yielded 1.59 percent, up from 1.57 percent Friday.
Analysts say investors are feeling more confident now that the war in Iraq is winding down and companies' first-quarter earnings have generally been better than expected.
"Investors are hoping that some of the things we have been saying are right and that is the stall in the economy and the market in the past couple of months was due to the uncertainty created by the war," said Joseph Keating, chief investment officer at AmSouth Asset Management in Birmingham, Ala.
Today's economic news was upbeat, with the Commerce Department reporting that consumers boosted their spending by 0.4 percent in March, the biggest gain this year as worries about the Iraq war lessened. It marked the strongest monthly increase since a 1.1 percent surge last December.
The department also reported that Americans' incomes in March increased by 0.4 percent, double the 0.2 percent increase of February.
Both readings were an improvement over the recent past, but economists said a sustained rebound in incomes and spending won't happen until the U.S. employment picture improves.
Among Wall Street's gainers, Dow industrial McDonald's rose $1.12 to $16.93 on first-quarter profits that beat analysts' expectations by a penny a share.
Procter & Gamble, another Dow stock, rose $1.55 to $90.69 after meeting earnings expectations and saying it was on track to meeting 2003 estimates.
SAFECO advanced $1.45 to $37.82 after the insurance and investment company reported profits that exceeded Wall Street's forecast by 4 cents a share.
Overseas, Japan's Nikkei stock average finished down 1.2 percent. In Europe, France's CAC-40 rose 2.9 percent, Britain's FTSE 100 advanced 1.8 percent and Germany's DAX index climbed 4.1 percent.
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