Better-than-expected earnings from big consumer brands Best Buy, ConAgra Foods Inc. and Dr Pepper Snapple Group Inc. sent the Dow Jones industrial average up 174 points Thursday to its highest level in six weeks. It has surged 21 percent since hitting a nearly 12-year low on March 9. And the technology-dominated Nasdaq composite index is now up 0.63 percent for 2009.
Strong demand for government debt at the Treasury Department's latest auction also lifted stocks by helping investors set aside recent nervousness about the government's ability to fund its economic stimulus and financial bailout programs.
The advance technically put the Dow in bull market territory; a bull market is defined as a 20 percent rise from a low point. But analysts are still hesitant to call the end of the bear market — there is a phenomenon known as a bear market rally that can quickly collapse in an uncertain economic environment.
Kevin Kramer, chief operating officer at West End Financial Advisors, an asset management company in New York, said unemployment, limited access to credit and heavy loads of debt are likely to keep curbing economic growth, and that may curtail stocks' advance.
"Just because things aren't getting worse doesn't mean they're getting better," Kramer said. "You stopped the flow of blood out of my body, but it doesn't mean I'm going to survive."
The Dow jumped 174.75, or 2.3 percent, at 7,924.56, its highest close since Feb. 12. It remains down 9.7 percent for the year, however, and down 44 percent from its record close of 14,164.53 in October 2007.
Broader stock indicators also gained. The Standard & Poor's 500 index rose 18.98, or 2.3 percent, to 832.86, and the Nasdaq rose 58.05, or 3.8 percent, to 1,587.00.
Meanwhile, government data indicated that the economy is still in decline, but at a less devastating pace than feared.
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