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Factory orders, worker output fuel Nasdaq rise

Other indexes reach heights not seen in more than a year

NEW YORK — The Nasdaq composite index notched its longest winning streak in more than three years Thursday after strong gains in factory orders and worker productivity fueled investor expectations of a rebounding economy.

Other market indicators also advanced, reaching heights not seen in more than a year.

Buying accelerated in the afternoon despite an unexpected rise in jobless claims. Analysts said investors remained upbeat and were willing to make additional modest bets on the market — particularly in tech stocks — even after several days of rallies.

"It's hard to doubt the economy is just going to get stronger and stronger," said Peter Dunay, chief market strategist at Wall Street Access, a New York-based brokerage firm. "Productivity numbers are very positive. Factory orders are picking up. Retail sales continue to be strong."

The Nasdaq climbed 16.07, or 0.9 percent, to 1,868.97, for a seven-day gain of 104 points. The last time the tech-focused index notched seven straight days of gains was the period ended February 8, 2000; Thursday's close also was the highest level since March 19, 2002, when the Nasdaq stood at 1,880.87.

The blue chips also rose. The Dow Jones industrial average advanced 19.44, or 0.2 percent, to 9,587.90, for a five-day gain of 254 points. The blue-chip average is at its highest level since June 18, 2002.

And the Standard & Poor's 500 index rose 1.70, or 0.2 percent, to 1,027.97, for an eight-day gain of nearly 35 points. The last time the index posted an eight-day winning streak was the period ended March 21; Thursday's close is the highest level since June 18, 2002.

The Commerce Department reported Thursday that U.S. factory orders rose 1.6 percent in July.

Meanwhile, the Labor Department reported that U.S. productivity rose at an annual rate of 6.8 percent in the second quarter.

But in a separate report, the department said new jobless claims jumped last week by a seasonally adjusted 15,000 to 413,000.

"The data more or less continues to confirm the market viewpoint the economy is strengthening," said Steven Goldman, chief market strategist at Weeden & Co. in Greenwich, Conn.

Todd Leone, managing director of equity trading at SG Cowen Securities, agreed.

"We're finally, after three years, seeing some growth," he said. "Productivity is picking up. Capital expenditures are coming through. . . . A lot of investors are underinvested in the tech group, so we're seeing some buying."

Stocks have climbed since mid-March to their highest levels in more than a year as investors grow increasingly upbeat about a resurging economy by year's end. Still, analysts caution that market gains could be limited in the weeks ahead after rising so quickly.

"The problem is the market has been so far ahead of the curve and pushed higher even before the economy did better, that it needs to see positive (third-quarter) earnings to drive it higher," Dunay said.