U.S. investors piled on a dizzying two-year advance in stocks on Thursday, using a brief slip on negative economic news as an opportunity to buy into market leaders.
An index of semiconductors' shares .SOX gained 1.4 percent and is now up 21.3 percent since early December, around the time when the most recent leg of the run-up started.
The S&P energy sector .GSPE gained 0.8 percent. U.S. crude futures jumped 1.7 percent as unrest in the Middle East kept focus on supply, boosting shares of energy companies.
Futures had dipped early in the session after data showed both a rise in consumer prices and new claims for unemployment benefits, but the dip didn't last long after the open.
"People have been focusing on the positives like the outlook for corporations and a good earnings season," said Brian Lazorishak, a money manager at Chase Investment Counsel in Charlottesville, Virginia.
"Geopolitical issues have been pushed aside, maybe prematurely," Lazorishak said.
The S&P 500 has doubled its value in less than two years, the quickest 100 percent gain since the Great Depression. However, volume has been light in the most recent leg of the rally, with just 6.7 billion shares changing hands Thursday on the New York Stock Exchange, NYSE Amex and Nasdaq combined -- the second-lowest so far in 2011.
The Dow Jones industrial average .DJI gained 29.97 points, or 0.24 percent, to 12,318.14. The Standard & Poor's 500 Index .SPX rose 4.11 points, or 0.31 percent, to 1,340.43. The Nasdaq Composite Index .IXIC added 6.02 points, or 0.21 percent, to 2,831.58.
Advancing stocks outnumbered declining ones on the NYSE by a ratio of about 5 to 3, while on the Nasdaq, about three stocks rose for every two that fell.
The S&P 500 faces little technical resistance before the 1,361 area that marks the 76.4 percent retracement of its slide from the 2007 highs to the low hit on March 6, 2009.
A Fibonacci projection of the latest leg of the rally also draws a target near 1,361, suggesting the S&P could face strong resistance at that level.
Data showed U.S. core consumer prices rose at the quickest pace in 15 months in January but economists said the turnaround in prices was unlikely to derail the Federal Reserve's plan to continue pumping money into the economy.
That excess liquidity has been one of the main drivers of the stocks rally in recent months.
A separate report showed factory activity in the U.S. Mid-Atlantic region rose in February to its highest since January 2004, with an employment subindex reaching its highest point since April 1973.