Stocks rise on consumer spending data

Stocks climbed higher for the second straight day Thursday as an already buoyant Wall Street embraced robust consumer spending figures and largely overcame disappointment in Google Inc.’s profit report. Both the Dow Jones industrials and the Russell 2000 index of smaller companies closed at new highs.

The gains followed Wall Street’s best day of the year on Wednesday, when it advanced sharply after the Federal Reserve signaled that the economy remained solid and that inflation was mostly in check. The central bank’s comments, which followed its decision to leave short-term interest rates unchanged, injected a bit of confidence into an uncertain market. The first month of the year had revealed investor uneasiness about whether stocks were poised to climb higher from sharp gains seen in 2006 or whether the Fed and a drop corporate profits would bring an unceremonious end to the party.

Economic data continued to play a big role in trading, as it has all week. As expected, consumer spending in December showed its biggest increase in five months, rising 0.7 percent.

“It seems to me the Fed is on hold for the foreseeable future and stocks are taking solace in that,” said Brian Levitt, corporate economist for OppenheimerFunds Inc. While he expects the Fed is most likely to leave rates unchanged in 2007, he said that if it did make a move the central bank would be more likely to raise rates than lower them.

According to preliminary calculations, the Dow Jones industrial average advanced 51.99, or 0.41 percent, to 12,673.68. The session saw the blue chip average’s 27th record close since the start of October, coming in well above the record of 12,621.77 set little more than a week ago, on Jan. 24. A new trading high of 12,682.57 topped a day-old record of 12,657.02.

Broader stock indicators also showed strong gains. The Standard & Poor’s 500 index rose 7.70, or 0.54 percent, to 1,445.94, and the Nasdaq composite index was up 4.45, or 0.18 percent, at 2,468.38.

The Russell 2000 rose 7.43, or 0.93 percent, to 807.77. The index first broke the 800 mark on Wednesday.

Bond prices fell following the economic figures, with the yield on the benchmark 10-year Treasury note rising to 4.83 percent from 4.82 percent late Wednesday. The dollar was mixed against other major currencies, while gold prices rose.

Light sweet crude settled down 84 cents at $57.30 per barrel on the New York Mercantile Exchange.

In other economic news, the Labor Department reported the number of newly laid off workers seeking unemployment benefits fell by 20,000 last week to 307,000. The figure pushed the four-week average for claims to the lowest level in a year. The reading also bolstered investor confidence for the department’s January unemployment report, which is due Friday.

Advancing issues outnumbered decliners by about 3 to 1 on the New York Stock Exchange, where volume came to 1.69 billion shares.

Overseas, Japan’s Nikkei stock average closed up 0.78 percent. Britain’s FTSE 100 finished up 1.28 percent, Germany’s DAX index closed up 0.92 percent, and France’s CAC-40 rose 0.96 percent.