Positive Economic News Sends Dow Up 94.28

NEW YORK | The stock market notched its second straight daily advance Thursday, with investors assuaged by a pullback in oil prices and some better-than-expected economic data.

Wall Street has been worried about cash-strapped consumers paring back their spending, so it was pleased that the energy markets gave up early gains that briefly drove crude oil above $125 per barrel.

In other positive signs, the Philadelphia Federal Reserve said regional manufacturing activity is contracting in May at a much slower pace than in April, while major companies including General Electric Co. and CBS Corp. were making deals.

"The encouraging news is that the markets have become more functional, and large companies are able to make strategic purchases and sales, which previously was a very difficult thing to do," said Alan Gayle, senior investment strategist for RidgeWorth Capital Management. Still, he added, "the market is still trying to digest the severity of the slowdown."

The Dow Jones industrial average rose 94.28, or 0.73 percent, to 12,992.66.

Broader stock indicators advanced more than 1 percent to their highest closing levels since Jan. 3.

The Standard & Poor's 500 index rose 14.91, or 1.06 percent, to 1,423.57, and the Nasdaq composite index rose 37.03, or 1.48 percent, to 2,533.73.

The technology-laden Nasdaq got a boost from Intel Corp., which rose $1.13, or 4.7 percent, to $24.97 after a Lehman Brothers analyst lifted his price target on the chip maker, citing strong product demand.

Bond prices rose. The yield on the benchmark 10-year Treasury note, which moves opposite its price, fell to 3.82 percent from 3.92 percent late Wednesday.

The dollar was lower against most other major currencies, and gold prices climbed.

J.C. Penney's quarterly profit came in a bit better than expected, helping its shares rise $2.07, or 4.7 percent, to $46.32, but it said a decline in consumer spending cut its first-quarter profit in half, and predicted "difficult" conditions for the entire year.

The Russell 2000 index of smaller companies rose 7.31, or 0.99 percent, to 743.38.

Advancing issues led decliners by more than 2 to 1 on the New York Stock Exchange.