NEW YORK (AP) — Wall Street regained some upward momentum Thursday, rising on news that President Bush would sign a tax cut bill into law and on a favorable court decision for cigarette makers including Altria.
Stocks gained after Bush announced he would sign a dramatically reduced compromise version of his tax cut plan. The plan calls for $350 billion in tax cuts, just under half the $726 billion package Bush wanted.
The Dow Jones industrial average closed the session up 77.59, or 0.9 percent, at 8,594.02.
The broader market was also higher. The NASDAQ composite index rose 17.68, or 1.2 percent, to 1,507.55. The Standard & Poor's 500 index advanced 8.45, or 0.9 percent, to 931.87.
For most of the week, the market has been vulnerable to profit taking, but Thursday's rally was a return to the gains that have dominated Wall Street since April, when companies reported surprisingly strong first-quarter results.
Aside from the tax cut plan, analysts also attributed Thursday's buying to better-than-expected earnings and the fact that the market was breaking important psychological levels with the NASDAQ rising above the 1,500 level.
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"That is the top that we saw in November of last year. The fact that we have seen the potential for this resistance level turning to support is going to get (investors) more excited and keep them in the market," said Chris Johnson, manager of quantitative analysis at Schaeffer's Investment Research in Cincinnati.
Wall Street took in stride a Labor Department report that new applications for state unemployment insurance rose by a seasonally adjusted 7,000 to 428,000 during the week ending May 17. The increase was attributed to businesses closing following tornadoes in the Midwest.
The market managed to advance despite investors' concerns about terrorism after the Bush administration on Tuesday raised the nation's terror alert level to "orange," indicating a high risk for attacks.
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