The rise also marked a sharp contrast to the start of the week, when stocks fell sharply amid concerns that some hedge funds could succumb to ill-placed bets on the housing sector.
But investors, heartened by signs of a happy and spending consumer, decided to put some money on the table. Though retail sales generally appeared to be crimped last month by higher gasoline prices and a tepid housing market, and the outlook for the coming months was difficult to ascertain, the overall reading wasn't as dour as some investors had expected.
Several reports beat Street expectations -- notably that of Wal-Mart Stores Inc., the world's largest retailer, which posted a better-than-expected 2.4 percent jump in sales at stores open at least a year.
"It's relief that things weren't as bad as people expected," said Bill Schultz, chief investment officer at McQueen, Ball & Associates, referring to the retailers' reports and the economy at large. "We're maybe getting slower growth but not the fall-of-the-cliff economic scenarios."
But, Schultz said, "I think it is, over the near term, a little bit overdone, certainly on a two-day basis," he added, referring to the rally.
Given the nearly 400-point swing the Dow has shown this week and the big gains yesterday, a profit-taking session today wouldn't come as a surprise.
The S&P 500 rose 28.94, or 1.91 percent, to 1,547.70, above its record close of 1,539.18, set June 4.
The Dow shot up 283.86, or 2.09 percent, to 13,861.73; its previous record close, which came June 4, was 13,676.32. Yesterday's jump was the biggest one-day percentage gain for the blue chip index since October 2003 and the biggest single-session point gain since October 2002. The Dow also reached a trading high of 13,869.94 and saw its 50th record close since the start of October.
The Nasdaq Composite index rose 49.94, or 1.88 percent, to 2,701.73; the rise marked the biggest one-day percentage increase since March. The last time the Nasdaq closed at such levels was in February 2001. Still, the index is nowhere near its closing record of 5,048.62, set in March 2000, when it was bloated by the late-1990s tech boom.
