Updated from 4:06 p.m. EDT
Stocks in the U.S. once again shook off early jitters and made a late surge in the last hour of trading to close solidly higher, mimicking the prior session.
Dow Jones Industrial Average
fell near the flat line in afternoon trading, but when the closing bell rang it was ahead by 100.96 points, or 0.76%, to 13,463.33. Twenty-five of the Dow's 30 components finished in the black, led by a 3.3% increase in shares of
rose 6.39 points, or 0.44%, to 1472.20 after spending much of the day wavering. The
added 22.11 points, or 0.87%, to 2575.98.
Recent sessions have seen stocks swing back and forth between positive and negative, and in short time spans, as investors tried to get a handle on their worries about the credit market.
"The bears couldn't keep the market down today," said Paul Mendelsohn, chief investment strategist with Windham Financial. "That's telling me there's institutional buying around the end of the day, and that type of rally tells you that shorts are being squeezed. We've bounced off the 200-day moving average, but now we're hitting a little resistance."
About 3.99 billion shares changed hands on the
New York Stock Exchange
, as advancers topped decliners by a 2-to-1 margin. Volume on the Nasdaq reached 2.39 billion shares, with winners edging losers 8 to 7.
"We had a rally, but the volume and breadth wasn't as robust as it usually is on down days," said Paul Nolte, director of investments with Hinsdale Associates. "There's a little buying ahead of what many think will be a decent jobs report. This may mean that people believe that the subprime borrowing issue is more contained than they previously thought."
Before the open, traders began digesting the latest round of economic data. The Labor Department said initial jobless claims rose by 4,000 last week to 307,000 claims. The less-volatile four-week moving average added 1,750 to 313,000 claims.
Also on the economic docket, the Census Bureau said factory orders for June increased 0.6%, compared to an expected 1% rise.
However, the latest U.S. nonfarm payrolls report was looming over Wall Street. The report, due at 8:30 a.m. EDT on Friday, is expected to reveal that the U.S. economy created roughly 135,000 jobs last month. The unemployment rate is expected to remain at 4.5%, and average hourly earnings should rise 0.3%.
Treasury prices gained ground. The 10-year note was up 9/32 in price, yielding 4.76%, and the 30-year bond added 13/32, yielding 4.90%.
Crude also moved higher, but remained below record levels. After setting a new intraday high of $78.77 a barrel before reversing sharply in the prior session, the September benchmark crude contract climbed 33 cents at $76.86 a barrel.
Earnings were in focus thanks to several solid reports. Following the previous close,
reported in-line results but finished 1% lower to $26.92.
also posted results after the last close. Disney topped analysts' estimates and announced the acquisition of Club Penguin, a virtual community for kids. Disney tacked on 53 cents, or 1.6%, to $34.36.
Meanwhile, Electronic Arts posted a loss that still beat expectations, but the video-game maker offered weak fiscal second-quarter guidance. Still, shares rose $3.46, or 7.2%, to $51.56.
Among the new day's stocks making headlines,
said its second-quarter revenue jumped 28% and earnings beat expectations. The stock jumped $2.49, or 8.8%, to $30.90.
lost 7 cents a share in its most recent quarter, but that was a penny less than analysts anticipated. Revenue declined slightly year over year to $2.56 billion. Nortel tumbled $1.25, or 5.8%, to $20.49.
also had profit numbers that were better than expected.
As fears that M&A activity would dry up permeated throughout the market,
announced an all-cash bid to acquire
for $4.4 billion, or $48 a share. Checkfree surged $8.57, or 23.3%, to close at $45.40.
said it will purchase the ASAP Software unit of
for $340 million. Shares of Corporate Express gained 10 cents, or 0.7%, to $13.69.