NEW YORK (CNN/Money) - U.S. stocks rallied Thursday for the second session in a row, as investors cheered a strong profit report from Hewlett-Packard and some signs of strength in the economy.

The Nasdaq composite (up 48.20 to 1467.55, Charts) gained around 3.4 percent, the Dow Jones industrial average (up 222.14 to 8845.15, Charts) gained around 2.6 percent, and the Standard & Poor's 500 index (up 19.61 to 933.76, Charts) gained around 2.1 percent.

The Nasdaq conquered a big hurdle by breaking through a key resistance level at 1,423, the closing high it hit during the summer's rally. Having closed above that level, traders say, it has the potential to move higher in the near future.

"We're seeing healthy volume. We're seeing the buyers enter in the morning and pretty much stay with it through the close," Susan Green, a trader at Bear Stearns, told CNNfn's Street Sweep.

"Tomorrow, we should see follow through on the upside," she added. "There's a lot going on, but right now it appears as if the money is reentering the marketplace, and we're not looking for any major obstacles tomorrow or going into next week."

There are no significant corporate results or economic reports expected Friday.

Computer products maker Hewlett-Packard (HPQ: up $2.14 to $18.99, Research, Estimates) was among the factors revving up the rally Thursday. The company reported a fiscal fourth-quarter profit of 24 cents a share late Wednesday, 2 cents better than expected and up from the 8 cents a share earned a year earlier. Looking forward, Chairwoman Carly Fiorina said that the company is comfortable with current fourth-quarter estimates.

The stock is a member of the 30 Dow industrials and is also an influence on the technology stocks traded on the Nasdaq.

"Today is very news driven. You've got GE, you've got HPQ, and the economic reports were a little better," said Donald Selkin, director of research at Joseph Stevens. "It's the tech stocks that are leading the way. You're seeing a rotation out of the consumer stocks and into the techs."

Market breadth was positive on very strong volume. On the New York Stock Exchange, advancers beat decliners by more than 2 to 1 as 2.02 billion shares changed hands. On the Nasdaq, winners topped losers almost 2 to 1 as 2.40 billion shares traded.

Signs of strength in the economy played a role in the rally as well. The number of Americans filing new claims for unemployment fell last week by 25,000 to 376,000, the lowest weekly number since July. Economists surveyed by Briefing.com had expected a rise.

The October report on leading economic indicators was flat, compared with the slight decline economists were expecting. The report breaks a four-month trend of declines. And the Federal Reserve Bank of Philadelphia's regional outlook turned positive this month; economists expected it to remain slightly negative.

"I'm very happy about how the market's acting, but the thing is, we're getting to overbought levels," said Joseph Stevens' Selkin. "I think tomorrow [Friday] we could be down a little, but it won't break our seven-week run on the Dow. We'll still be up for the week."

The Dow industrials has closed higher for the last six weeks.

For this week, as of Thursday's close, the Dow is up around 266 points, the Nasdaq is up about 56 points, and the S&P 500 is up around 24 points.

Since hitting their intraday lows on Oct. 10, all three indexes have rallied substantially: the Dow is up 23 percent, the Nasdaq is up 31 percent and the S&P 500 is up 20 percent.

In other stock-specific news, General Electric (GE: up $2.05 to $26.85, Research, Estimates) lowered its 2002 earnings estimate by 14 cents a share to $1.51 after a $1.4 billion, or 14-cent-a-share charge for its Employers Reassurance unit. The charge had been widely anticipated by analysts and investors alike, due to the company's previous statements about trouble in the reinsurance business. However, some market watchers had expected an even larger charge.

The Dow 30 company also trimmed its 2003 profit estimate. However, the new forecasts for both years still represent growth from the same period one year earlier. In addition, the conglomerate said it is raising its dividend by 6 percent. Investors seemed to like the news overall, lifting shares of the stock.

Shares of another Dow component, Merck (MRK: up $1.34 to $58.82, Research, Estimates), rose after the company said preliminary tests of its experimental cervical cancer vaccine showed it to be effective in virtually every case.

United Airlines parent UAL appears more likely to avoid bankruptcy after the union representing 37,500 machinists reached a tentative agreement on a $1.5 billion cost-saving package late Wednesday. Shares of UAL (UAL: up $0.22 to $3.32, Research, Estimates) rallied, giving a boost to the airline sector.

"You've got HP today. You also have a structural shift, a seasonal shift that is very positive right now," said Bryan Piskorowski, a market analyst at Prudential Financial.

However, with any fast runup, a risk of some kind of pullback lingers, traders cautioned.

"All of this building up with very little fundamentally to support it makes us vulnerable," Piskorowski said. "It probably means there's going to be some news in the next few sessions that will cause some profit taking to come into play."

Treasury prices fell, pushing the 10-year note yield up to 4.15 percent from 4.06 percent late Wednesday. Treasury prices and yields move in opposite directions. The dollar was little changed versus the euro and the yen.

Light crude oil futures rose 26 cents to $26.35 a barrel in New York. Gold prices closed unchanged at $317.60 an ounce.