Stocks Extend Gains to 5 Days After Jobs Report

FILE - In this Sept. 30, 2008 file photo, Wall St. is shown in New York. Investors are adding more...

FILE - In this Sept. 30, 2008 file photo, Wall St. is shown in New York. Investors are adding more money to stocks following a drop in weekly unemployment claims Thursday, Sept. 10, 2009, and an upbeat forecast from Procter & Gamble.(AP Photo/Mark Lennihan, file)

(AP)

Investors poured money into stocks for a fifth day after a drop in weekly unemployment claims and an upbeat forecast from Procter & Gamble raised hopes for the economy. Falling interest rates on Treasury securities also fed demand for stocks.

The Dow Jones industrial average rose 80 points Thursday to its highest close since October. The index is up 347 points in five days.

The gains have come even as analysts say the market is overdue for a retreat. The Standard & Poor's 500 index is up 54.3 percent since hitting a 12-year low in March, though it's still down 33.3 percent from its peak in October 2007.

The latest push higher followed the Labor Department's report that jobless claims fell more than expected to 550,000 last week. An upbeat forecast from consumer products maker Procter & Gamble Co. added to enthusiasm about an economic recovery.

Bond prices surged after a $12 billion auction of 30-year Treasury notes drew strong demand. That pushed Treasury yields lower and made investors look for investments with better returns.

Meanwhile, a government report found that U.S. crude inventories fell more than expected last week. That stirred hopes that a strengthening economy is increasing its appetite for resources and lifted energy stocks.

David Bianco, head of U.S. equity strategy at Banc of America Securities-Merrill Lynch in New York, said the rally has merit because stocks had tumbled so far since their peak.

"This is a rally that's supported by the fundamentals," he said. "Maybe it's moving a little bit too fast for the normal rules of thumb but we haven't seen a crash like that since the Great Depression."

The Dow rose 80.26, or 0.8 percent, to 9,627.48 to its highest close since Oct. 6, when it ended at 9,956. The index is up 3.7 percent in five days.

The broader S&P 500 index rose 10.77, or 1 percent, to 1,044.14, its first five-day climb since November.