Stocks rose Thursday, reversing earlier losses, as investors continue to maintain the recent market rally.
Major indexes overcame early losses and finished slightly higher, including the Dow Jones industrial average, which added 37 points to set a fresh 2009 high. The Dow has risen for eight straight days, its longest winning streak since April 2007.
Trading lacked enthusiasm, however, as it has over the past week, with many investors shying away from making greater commitments to stocks.
Volume has been extremely light as many traders go on vacation, adding to the market's recent choppiness. The day's economic news, including a slightly smaller-than-expected dip in initial unemployment claims and a benign reading on gross domestic product, did little to excite investors.
Analysts say the market has been running on its own momentum more than anything else, adding that a lot of the improving economic data has already been priced into stocks.
A lot of activity has also been driven by short-covering, analysts say, which tends to amplify gains in the market. Short-covering occurs when investors have to buy stock after having earlier sold borrowed shares in a bet they would fall.
Traders have been anticipating a pullback for weeks, but the dips that have occurred tend to be met with more buying.
"There is just too much cash sitting on the sidelines," said Phil Orlando, chief equity market strategist at Federated Investors.
After giving up as much as 84 points early on, the Dow rose 37.11, or 0.4%, to close at 9,580.63. The Dow's eight-day advance totals 445 points, or 4.9%.
The Standard & Poor's 500 index rose 2.86, or 0.3%, to 1,030.98, while the Nasdaq composite index rose 3.30, or 0.2%, to 2,027.73.
Both the S&P 500 and the Nasdaq composite indexes have finished higher seven out of the past eight days, rising about 5% over that period.
About eight stocks rose for every seven that fell on the New York Stock Exchange, where consolidated volume came to 5.82 billion shares, compared with 5.10 billion shares on Wednesday.
Despite the run-up in stocks, investors are nervous about overextending the market's massive spring and summer rally, in which stocks have risen more than 45% off of 12-year lows since early March.
"You tend to have those moves run out of steam at some time," said Art Hogan, chief market analyst at Jefferies & Co.
Big gains in a handful of financial stocks helped to turn the market around. Shares of American International Group surged nearly 27%, rising $10.15 to $47.84, as analysts speculated the company might be reconciling with former CEO Maurice "Hank" Greenberg, who could help bring private capital to the company. AIG shares have more than doubled in eight days.
CIT Group Inc. jumped 22.8%, adding 29 cents to $1.56. Citigroup rose 42 cents, or 9.1%, to $5.05.
Shares of Boeing rose, giving a boost to the Dow, after the company said its long-delayed 787 aircraft will be ready for its first flight by the end of this year. Shares jumped $4, or 8.4%, to $51.82.
Energy stocks, which had weighed on the market early in the day, pulled off of their lows as oil prices turned higher. Like stocks, oil prices have been extremely volatile in recent weeks as investors try to determine whether current prices are warranted given still weak demand.
Crude for October delivery added $1.06 to settle at $72.49 a barrel on the New York Mercantile Exchange.