Investors hunted for bargains Thursday following a steep sell-off at the start of the week.
Fresh economic data and a weak dollar are making stocks look more attractive after a flat finish on Wednesday.
The move higher comes ahead of a forecast of economic activity. The New York-based Conference Board's January index of leading economic indicators is expected to be flat, according to economists. The index is designed to forecast economic activity in the next three to six months based on 10 economic components, including stock prices, building permits and initial claims for unemployment benefits.
The report is due at 10 a.m. EST.
Investors appeared unfazed by other economic numbers. The Labor Department said initial jobless benefit claims totaled 627,000 last week, unchanged from the previous week. Economists were expecting claims of 620,000, according to Thomson Reuters.
The total number of people receiving unemployment benefits reached an all-time high for the fourth consecutive week. A total of 4.99 million people were receiving benefits. Economists had expected the figure to rise to 4.81 million.
A reading on wholesale prices jumped more than expected as well. The Producer Price Index, which measures inflation before it reaches the consumer, rose in January for the first time in six months. The index rose 0.8 percent. Economists forecast only a 0.2 percent jump, according to Thomson Reuters.
Excluding volatile energy and food prices, the index rose 0.4 percent — four times more than economists had expected.
In the first half-hour of trading, the Dow Jones industrial average rose 47.23, or 0.6 percent, to 7,602.86.
Broader stock indicators also rose. The Standard & Poor's 500 index rose 7.65, or 1 percent, to 796.07, and the Nasdaq composite index rose 11.95, or 0.8 percent, to 1,479.92.
The Russell 2000 index of smaller companies rose 4.75, or 1.1 percent, to 427.93.
Advancing issues outnumbered decliners by about 3 to 1 on the New York Stock Exchange, where volume came to 112.7 million shares.
On Wednesday, the Dow gained just 3.03, meaning it is still hovering within 4 points of its Nov. 20 low, reached as the market plunged during global credit crisis. The Dow dropped nearly 300 points Tuesday as investors feared that despite government programs aimed at reviving the economy, a recovery would be a long, drawn out process.
Bond prices fell Thursday. The yield on the benchmark 10-year Treasury note, which moves opposite its price, rose to 2.86 percent from 2.75 percent late Wednesday. The yield on the three-month T-bill, considered one of the safest investments, rose to 0.31 percent from 0.30 percent late Wednesday.
The dollar was mixed against other major currencies, while gold prices fell.
Light, sweet crude rose $1.72 to $36.34 per barrel on the New York Mercantile Exchange.
Overseas, Japan's Nikkei stock average rose 0.31 percent. In afternoon trading, Britain's FTSE 100 rose 0.82 percent, Germany's DAX index rose 1.29 percent, and France's CAC-40 gained 1.30 percent.
Copyright 2009 The Associated Press.