Stocks Close With a Flourish

Updated from 4:20 p.m. EDT

Stocks in New York stayed strong through the finish Thursday as a rally in technology and a relatively positive manufacturing report helped investors look past a series of otherwise disappointing economic data.

The Dow Jones Industrial Average had a shaky start, but shook off early losses to close up 94.28 points, or 0.73%, to 12,992.66. The S&P 500 climbed 14.91 points, or 1.06%, to 1423.57. The tech-heavy Nasdaq Composite enjoyed a particularly good day, tacking on 37.03 points, or 1.48%, to 2533.73, as component CNET (CNET Quote) surged on buyout news.

In spite of that move, market sentiment was bearish at the open, but investors perked up after Northeastern factory activity data showed vast improvement. The Philadelphia Fed Index came in at negative 15.6 for May -- still a contraction, but far less egregious than last month's decline of 24.9, and better than the economists' consensus for negative 19.

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"Overall the survey is soft," said Ian Shepherdson, chief U.S. economist with High Frequency Economics, in an emailed statement, "but its weakness has not been fully reflected in the one industrial survey that really matters, the [Institute for Supply Management] report."

The ISM dispatches monthly nationwide manufacturing numbers, and its next installment is due on June 2.

Shepherdson added that the Federal Reserve's industrial output numbers show that "manufacturing is now struggling, though it is certainly not in meltdown." The report revealed that industrial production fell 0.7% in April, worse than the 0.3% decline that had been expected. March was revised to show an increase of only 0.2%, rather than the 0.3% uptick that had been reported.