Stocks climb higher after Alcoa report, jobs data

The stock market’s rally resumed Thursday after a one-day breather as investors got encouraging readings on consumer spending and corporate profits.

The Dow Jones industrials rose 61 points. The blue-chip average edged lower Wednesday after climbing 244 points Monday and Tuesday, its best two-day advance since July.

The market opened higher after Alcoa surprised investors late Wednesday with its first quarterly profit in the last four quarters. The aluminum giant attributed the improvement to cost-cutting and rising sales to automakers. Shares of Alcoa rose 1.1%.

Also boosting stocks, a closely watched gauge released Thursday of sales at major retailers rose 0.1% in September, the first increase since July 2008.

The Labor Department added to the positive data when it reported that new claims for jobless benefits fell more than expected to the lowest level since early January.

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

The Dow rose 61.29 points, or 0.6%, to 9,786.87. The index was up as much as 111 points during the session but lost ground after demand at a government auction of 30-year bonds fell short of expectations.

The Standard & Poor’s 500 index rose 7.90 points, or 0.8%, to 1,065.48, while the Nasdaq composite index rose 13.60 points, or 0.6%, to 2,123.93.

The Russell 2,000 index of smaller companies climbed 0.9%.

About three stocks rose for every one that fell on the New York Stock Exchange.

The rise in stocks this week has put the market’s seven-month rally back on track, sending the major indexes toward their best weekly gains since early July after two down weeks. The S&P; 500 index is up 57% since hitting a 12-year low in March.

Investors had become discouraged in recent weeks by a stream of disappointing economic data, as improvements in areas like manufacturing slowed. But the market got a boost early this week from signs of growth in service industries and a surprise interest rate hike in Australia that was seen as a vote of confidence in the global economy.

Still, much depends on how the rest of earnings season goes. Many firms in the financial sector, one potential trouble spot, report next week.

Companies mostly beat modest earnings expectations for the second quarter because of cost-cutting, and many investors say they now want to see actual revenue growth as a driver of profits.

“I wouldn’t say we’re in the clear,” said Robert MacIntosh, chief economist at Eaton Vance Management.

In other market highlights:

* Yields on government bonds jumped after the weak Treasury auction. The benchmark 10-year T-note’s market yield rose to 3.25% from 3.17% late Wednesday.

* Gold rallied for a fifth straight session, as the dollar slumped further. The near-term futures contract rose $12.10 to $1,055.40, a fresh record close.

* Oil futures climbed $2.12 to settle at $71.69 a barrel on the New York Mercantile Exchange.

* Overseas, key stock indexes rose 0.9% in Britain, 1.3% in Germany and France, and 0.3% in Japan.