Stocks reverse early losses to close higher; Dow posts 8th straight gain

NEW YORK -- 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.