Updated from 4:30 p.m. EST

Stocks powered their way to a second-straight day of solid gains Thursday, as bullish comments from analysts and a spate of generally positive economic reports took investors' minds off accounting scandals.

The Dow Jones Industrial Average closed up 157 points, or 1.6%, to 9920. The Nasdaq was up 21 points, or 1%, to 1934, and the S&P 500 added 17 points, or 1.5%, to 1123.

Combined with Wednesday's gains, the Dow has now erased all of the losses it suffered on Tuesday, when investor paranoia about accounting practices knocked 248 points off the blue-chip average. The Nasdaq is still about 10 points below its Monday close.

Both averages ended January lower, a bad omen for the year according to some market watchers.

This week has been full of economic data, most of which has come in better than expected. On Thursday, Wall Street got the Chicago purchasing managers' index, which rose to 45.1 in January, as expected, from 41.5 in December.

Elsewhere, the Labor Department said the employment cost index rose 0.9% in the fourth quarter, slightly ahead of forecasts. Initial jobless claims rose 30,000 to 390,000 for the week ended Jan. 26, essentially in line with the consensus estimate. Meanwhile, the Commerce Department said personal consumption fell 0.2% in December, also in line with the consensus.

Newly released minutes showed Fed policymakers came close to leaving interest rates unchanged when they met in December. The notes describe the decision to impose a quarter-point cut as a "close call" and, perhaps significantly, said part of the rationale for signing off on it was that the Central Bank could quickly raise rates if inflation became an issue.

Plenty of corporate news was still influencing the market, even as earnings season is drawing to a close. Merrill Lynch upgraded Intel ( INTC) to strong buy from buy, saying the chipmaker should gain better-than-expected market share, and that visibility will improve. Analyst Joe Osha raised his full-year earnings projection to 73 cents a share from 70 cents, with a price target of $42. The stock rose $1.18, or 3.5%, to $35.04.

Procter & Gamble ( PG) posted second-quarter earnings of $1.03 a share, beating analysts' forecasts by a penny. Net sales rose 2% to $10.4 billion. After the release, Prudential Securities upgraded the consumer products maker to buy from hold, based on the stock's valuation. P&G shares ended up $3.39, or 4.3%, to $81.68.

Oracle ( ORCL) told analysts it expects the software industry to rebound this spring and that its current quarter will probably be its worst. Rumors that the company beat out Siebel Systems ( SEBL) for an accounting software contract with AT&T ( T) were also circulating Thursday. Oracle's stock closed up 64 cents, or 3.9%, to $17.26.

Verizon ( VZ) posted fourth-quarter earnings of 77 cents a share, matching Wall Street's estimates. The company forecast 2002 earnings in the range of $3.20 to $3.30 a share, compared with the consensus estimate of $3.24. Capital expenditures are projected to fall to between $15 billion and $16 billion. Shares of the telecommunications giant rose 27 cents, or 0.6%, to $46.35.

Tyco International ( TYC) continued to bounce back after two top executives said they were buying $30 million of shares in the conglomerate. The shares ended up 30 cents, or 0.9%, at $35.15.

Research in Motion ( RIMM) was performing well after being upgraded to the recommended list at Goldman Sachs. Shares climbed $1.08, or 4.4%, to $25.61.

After Wednesday's close Hotjobs.com ( HOTJ) posted fourth-quarter earnings of a penny a share on revenue of $25.1 million, beating analysts' expectations. The online job site expects to close its merger deal with Internet portal Yahoo! ( YHOO) during the first quarter.

Finally, McLeodUSA ( MCLD) filed a prepackaged Chapter 11 bankruptcy after coming to terms on a recapitalization plan with a group of bondholders.

Foreign markets were primarily higher. London's FTSE 100 gained 1.5% to 5165 and Germany's Xetra Dax closed up 1.1% to 5108. In Asia, Japan's Nikkei climbed 0.8% to 9998 while Hong Kong's Hang Seng fell 0.3% to 10,725.

Treasuries were mostly higher in the afternoon. The 10-year note was recently gaining 8/32 to 100 5/32, yielding 4.98%.

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