Stocks powered ahead in late afternoon trading Wednesday, lifting the Dow to close above 10,000 and the Nasdaq over 2,000 for the first time in months, as surprise growth in the key services sector and upbeat forecasts from technology companies stoked hopes for a swift economic turnaround.
The Dow rose 220 points closing at 10,142, the first time the average has closed above 10,000 in three months. The Nasdaq gained 83 points to close at 2,046, the first time above the 2,000 mark in four months.
Another wave of buying emerged late in the session after a midday pause, driving the averages to new session highs. Volume was extremely heavy, denoting good sponsorship from investors.
"The upward trend has become clear. That's something you don't want to fight," said Joe Liro, equity strategist at Stone & McCarthy Research Associates.
"We've come a long way very quickly and thus could be vulnerable to digestion," he added.
Underscoring the view that profits will rebound in tandem with the economy, albeit slowly in the first half of next year, Salomon Smith Barney upped its earnings estimates for the S&P 500 for the first time in a couple of years.
Many areas of the economy that stalled in the aftermath of the terrorist attacks are now snapping back. This week's share of economic news has so far been very encouraging as spending surged in October and both the NAPM index -- which gauges the health of thmanufacturing sector -- and the NAPM services index saw respectable bounces from prior levels.
In a separate development, corporate layoff announcements slumped in November, falling 25 percent to 181,412, according to outplacement firm Challenger, Gray and Christmas. So far in 2001, about 1.80 million layoffs have been announced by U.S. companies.
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