Stocks Climb After Retail Sales, Alcoa Earnings

The stock market resumed its rally after getting encouraging readings on two of the best gauges of the economy's health: consumer spending and corporate profits.

Specialist Evan Solomon, left, opens trading in Banco Santander on the floor of the New York Stock...

Specialist Evan Solomon, left, opens trading in Banco Santander on the floor of the New York Stock Exchange marking the company's IPO, Wednesday, Oct. 7, 2009. Spain's Banco Santander has raised $8.1 billion by selling new shares to expand Brazilian operations. It's the world's biggest initial public offering this year, and Brazil's biggest ever.(AP Photo/Richard Drew)

(AP)

The Dow Jones industrial average rose 61 points Thursday after falling modestly the day before. The gains added to the market's already steep climb for the week. Improving signals about the economy pushed the Dow up 244 points Monday and Tuesday, its best back-to-back advance since July.

Traders pounced on news that retailers last month had their first sales gains in more than a year. A closely watched gauge of sales at major retailers rose 0.1 percent for September. While still tepid, it was the first monthly rise in the International Council of Shopping Centers-Goldman Sachs tally since July 2008.

The growing hopes for consumer spending, which is crucial for an economic recovery, followed late Wednesday's good news from Alcoa Inc. The company surprised investors with its first profit in nine months, which the aluminum company attributed to cost-cutting and rising sales to automakers.

Alcoa is one of the first major companies to post its results. Its report and upbeat forecast for aluminum demand had many traders betting that companies' results for the July-September quarter, to be released in the coming weeks, will be better than expected.

"Alcoa set the tone and backed it up," Michael Feser, president of Zecco Trading said.

A slumping dollar helped pump up commodities prices, which gave a lift to energy and materials stocks.

Meanwhile, a better reading on the job market also fed investors' optimism. The Labor Department reported that new claims for jobless benefits fell to 521,000 last week from 554,000 the previous week. Claims came to the lowest level since early January.

The Dow rose 61.29, or 0.6 percent, to 9,786.87. The market ended off its best levels after demand at a government auction of 30-year bonds fell short of expectations. The Dow was up 111 points at its high.