FILE - In this Sept. 30, 2008 file photo, Wall St. is shown in New York. Investors are adding more money to stocks following a drop in weekly unemployment claims Thursday, Sept. 10, 2009, and an upbeat forecast from Procter & Gamble. (AP Photo/Mark Lennihan, file) NEW YORK—Investors poured money into stocks for a fifth day after a drop in weekly unemployment claims and an upbeat forecast from Procter & Gamble raised hopes for the economy. Falling interest rates on Treasury securities also fed demand for stocks.
The Dow Jones industrial average rose 80 points Thursday to its highest close since October. The index is up 347 points in five days.
The gains have come even as analysts say the market is overdue for a retreat. The Standard & Poor's 500 index is up 54.3 percent since hitting a 12-year low in March, though it's still down 33.3 percent from its peak in October 2007.
The latest push higher followed the Labor Department's report that jobless claims fell more than expected to 550,000 last week. An upbeat forecast from consumer products maker Procter & Gamble Co. added to enthusiasm about an economic recovery.
Bond prices surged after a $12 billion auction of 30-year Treasury notes drew strong demand. That pushed Treasury yields lower and made investors look for investments with better returns.
Meanwhile, a government report found that U.S. crude inventories fell more than expected last week. That stirred hopes that a strengthening economy is increasing its appetite for resources and lifted energy stocks.
David Bianco, head of U.S. equity strategy at Banc of America Securities-Merrill Lynch in New York, said the rally has merit because stocks had tumbled so far since their peak.
"This is a rally that's supported by the fundamentals," he said. "Maybe it's moving a little bit too fast for the normal rules of thumb but we haven't seen a crash like that since the Great Depression."
The Dow rose 80.26, or 0.8 percent, to 9,627.48 to its highest close since Oct. 6, when it ended at 9,956. The index is up 3.7 percent in five days.
The broader S&P 500 index rose 10.77, or 1 percent, to 1,044.14, its first five-day climb since November.
The Nasdaq composite index rose 23.63, or 1.2 percent, to 2,084.02.
The yield on the benchmark 10-year Treasury note fell to 3.35 percent from 3.48 percent late Wednesday. The yield on the 30-year bond fell to 4.20 percent from 4.33 percent.
Investors made selective bets on companies following a mixed batch of corporate forecasts.
P&G rose $2.28, or 4.2 percent, to $56.04, after the maker of Tide soap and Gillette razors said it expects sales will rebound this fall.
Agricultural company Monsanto Co. warned that its 2009 earnings would come in at the low end of its forecast and said it would cut more jobs than previously announced. The stock fell $4.18, or 5 percent, to $79.30.
Ralph Fogel, co-chief investment officer at Fogel Neale Partners in New York, argues that too many analysts are now expecting a pullback for it to happen. He pointed to a well-tested piece of Wall Street wisdom that if a certain prediction becomes too widely expected in the marketplace, that conclusion is often wrong.
"I'm not sure why sure this market is going to slow up so much," Fogel said. "We look for a nice continued move upward."
Some analysts remain cautious. Subodh Kumar, global investment strategist at Subodh Kumar & Associates in Toronto, contends that the market needs a break.
"The fact that it got here without any meaningful corrections means it hasn't stopped since March to test the validity of its assumptions," he said.
Three stocks rose for every one that fell on the New York Stock Exchange, where consolidated volume came to 5.4 billion shares compared with 5.3 billion Wednesday.
The Russell 2000 index of smaller companies rose 8.50, or 1.5 percent, to 594.90.
The dollar fell against other major currencies. Gold slipped.
Light, sweet crude rose 63 cents to settle at $71.94 a barrel on the New York Mercantile Exchange.
Overseas, Britain's FTSE 100 fell 0.3 percent, Germany's DAX index rose 0.4 percent, and France's CAC-40 slipped 0.1 percent. Japan's Nikkei stock average rose 2 percent.
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