NEW YORK -- A record jump in retail sales and better-than-expected earnings by Hewlett-Packard sent stocks higher Wednesday for the second straight session.
After weeks of rallying, the Dow Jones industrials are now halfway between the 9,605 level held before the Sept. 11 terrorist attacks and 10,000.
''Retail sales were fabulous. Everyone loved that. It's positive economic news, and we haven't had enough of that,'' said Arthur Hogan, chief market analyst at Jefferies & Co.
The Dow Jones industrial average closed up 72.66, or 0.8 percent, at 9,823.61, according to preliminary calculations. The Dow on Tuesday rose 196 Tuesday on positive news out of Afghanistan, where Taliban forces fled the capital, Kabul.
The market's broader indicators were also higher, after dipping occasionally into negative territory. The Nasdaq composite index advanced 11.08, or 0.6 percent, to 1,903.19, and the Standard & Poor's 500 index gained 2.12, or 0.2 percent, to 1,141.21.
The market has been rallying for weeks on investors' increasing confidence that the economy will recover next year. That upbeat attitude helped the Dow Friday to recoup the 1,369 points lost in the first week of trading following the attacks. And, the blue chip index is moving closer to 10,000, a level it hasn't closed at since Sept. 5, when it stood at 10,033.27.
Investors were enthusiastic Wednesday about a 7.1 percent jump in retail sales in October, the biggest one-month gain ever and a sharp contrast to the 2.2 percent dip in September sales. The positive news boosted investors' hope for an economic turnaround in 2002, because consumer spending accounts for two-thirds of the nation's economy.
''To see the consumer turn around that way is a positive for the economy,'' Hogan said.
Much of the strength in the October's retail sales came from a record 26.4 percent increase in car sales, which have been boosted by such incentives as zero percent financing. Automakers benefited Wednesday on Wall Street with General Motors gaining $1.04 to $46.03 and DaimlerChrysler advancing 92 cents to $38.55.
A string of stronger-than-anticipated earnings from retailers also pulled up the market. Among those issues, Federated Department Stores climbed $2.28 to $37.11, Payless ShoeSource advanced $1.61 to $57.76 and Tiffany rose $1.65 to $28.35.
Good news from Hewlett-Packard also contributed to Wednesday's gains. The Dow industrial soared 9 percent, up $1.85 at $22.08, after surpassing analysts' earnings forecasts by 11 cents a share.
HP chairwoman and chief executive Carly Fiorina said the company managed inventory aggressively and lowered expenses to deal with the economic slowdown.
But investors were wary about the ability of some tech issues to hold on to recent gains. IBM fell $2.35 to $114.35 ahead of its late-day meeting with analysts.
Applied Materials slipped 9 cents to $40.71, before releasing fiscal fourth quarter earnings after the market closed. The world's largest supplier to the semiconductor industry missed earnings expectations by a penny a share but said the outlook for the industry is strong. In extended-hours trading, Applied Materials lost another 6 cents.
Throughout Wednesday, much of the market, the Dow excluded, flirted with negative territory as investors secured profits from the recent rallies. Analysts called the profit taking a natural strategy given the run-up and the fact that the economic turnaround hasn't happened yet.
''At any junction we could have profit taking,'' Hogan said. ''Some folks are concerned we got prices up too high, too fast.''
Overall, however, analysts said investors remain upbeat, boosted by signs of success in the U.S. retaliation for the terrorist attacks, and reports that Monday's plane crash in New York resulted from mechanical malfunction, rather than terrorism.
''The mood is still positive, but the higher the market goes, the somewhat more guarded investors become,'' said Hugh Johnson, chief investment officer for First Albany Corp.
Advancing issues outnumbered decliners 3 to 2 on the New York Stock Exchange. Volume came to 1.41 billion shares, ahead of the 1.35 billion shares traded Tuesday.
The Russell 2000 index, which tracks smaller company stocks, rose 4.48, or 1.0 percent, to 452.82.
Overseas, markets were mixed Wednesday. Japan's Nikkei stock average finished the day up 0.6 percent. France's CAC-40 closed up 0.2 percent, Britain's FT-SE fell 0.7 percent, and Germany's DAX index inched up 0.1 percent.
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