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NEW YORK >> Wall Street shot higher today on better-than-expected manufacturing data, but gave up much of its gains after the Dow Jones industrials surpassed the 9,000 mark for the first time since December.
Analysts said investors were upbeat about an economic recovery, but some were cashing in profits on concerns that the market's recent surge might have come too fast, too soon.
"The economic activity is slow to improve but the market is optimistic," said John C. Forelli, portfolio manager for Independence Investment LLC in Boston. "For the market, the glass is half-full -- as opposed to three-quarters empty as it had been for a while."
Advancing issues outnumbered decliners 9 to 5 on the New York Stock Exchange. Volume was heavy.
The Dow closed up 47.55, or 0.5 percent, at 8,897.81, following a weekly advance of 2.9 percent last week. It was the best level seen since Nov. 27, 2002, when the Dow closed at 8,931.68.
Earlier in the afternoon, the blue chips rose as much as 153 points to hit 9,003.27. The last time the Dow rose above 9,000 during the day was Dec. 2, 2002; the last time the blue chips closed above 9,000 was Aug. 22, 2002, when they stood at 9,053.64.
The broader market finished mixed. The Nasdaq composite index fell 5.16, or 0.3 percent, to 1,590.75. Earlier in the day, the tech-focused index rose as much as 24 points. The Standard & Poor's 500 index rose 3.41, or 0.4 percent, to 967.00. The index closed above its Sept. 21, 2001, low of 965.80 for the first time since July 8, 2002. The Russell 2000 index rose 1.63, or 0.4 percent, to 442.63.
The price of the Treasury's 10-year note closed down 13/32 point, while its yield rose to 3.42 percent from 3.36 percent late Friday. The price of two-year Treasury notes was unchanged, but their yield fell to 1.31 from 1.33 percent late Friday.
The Institute for Supply Management reported that its manufacturing index was 49.4 percent last month, up from 45.4 in April. A reading below 50 means manufacturing activity is slowing; still, the figure was better than the 48.5 that economists were expecting.
However, the Commerce Department said spending on construction projects dipped by 0.3 percent in April from March to a seasonally adjusted annual rate of $862.6 billion. It was the third straight month that spending fell and was weaker than the 0.2 increase analysts were expecting.
ImClone surged $5, or 17.5 percent, to $33.50 after the biotech company's cancer drug Erbitux showed effectiveness in clinical trials.
Genentech climbed $4.12, or 6.6 percent, to $66.73 after researchers said the biotech company's experimental drug Avastin modestly lengthened survival for colon cancer patients in clinical trials.
AMR rose 61 cents, or 9.6 percent, to $6.95 after Goldman Sachs raised its stock rating on the parent of American Airlines to "outperform" from "in-line."
Decliners included Dow components Johnson & Johnson, which fell $1.13 to $53.22, and Intel, which lost 44 cents to $20.38.
Overseas, Japan's Nikkei stock average finished 1.5 percent higher. In Europe, France's CAC-40 rose 1.9 percent, Britain's FTSE 100 advanced 2 percent and Germany's DAX index gained 2.8 percent.
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