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NEW YORK (CNN/Money) -
Stocks rallied Thursday as end-of-quarter window dressing and some bargain hunting after two down weeks fired up a broad-based rally on Wall Street.
As of 6:15 p.m. ET, Nasdaq and S&P futures pointed to a flat open Friday, when fair value is taken into account.
The Nasdaq composite (up 25.82 to 2,141.22, Charts) rose 1.2 percent.
The Dow Jones industrial average (up 79.69 to 10,552.78, Charts) gained almost 0.8 percent and the broader Standard & Poor's 500 (up 10.79 to 1,227.68, Charts) added around 0.9 percent.
All three indices were down in morning trade but found momentum in the afternoon as investors scooped up a variety of shares. Around 25 out of 30 Dow stocks gained on the session. While a variety of sectors participated, gains in tech, financials and homebuilding were the most pronounced.
Friday's stock market will be influenced by more end-of-quarter moves and the session's variety of economic reports, said Tom Schrader, managing director of U.S. equity trading at Legg Mason.
"We've got some weighty numbers tomorrow, with consumer sentiment and Chicago PMI due," Schrader added.
Although Friday also brings August reads on personal income and spending, it will be the September reads on sentiment and manufacturing in the midwest that will be more relevant for a market worried about the aftermath of Hurricane's Katrina and Rita.
Stocks have experienced a particularly volatile week as investors juggled concerns about energy prices and the economy. Meanwhile, the last week of the quarter has meant increased trading volume, usually to the upside, as money managers make last-minute changes to their portfolios.
Thursday's gains were partly a function of that "quarter-end positioning," said Jack Ablin, chief investment officer at Harris Private Bank in Chicago. The morning's upbeat economic reports helped too, although neither fully reflect the post-Hurricane Katrina and Rita environment.
But many analysts were hard-pressed to name an exact reason for Thursday's advance.
"It's very hard to attribute it to an event or release because there is none," said Hugh Johnson, chairman of the Albany-based asset management company Johnson Illington Advisors. "I certainly wouldn't attach any significance to it. The professional money managers aren't doing much. They want to take a clear look at third-quarter earnings."
After the close, Micron Technology (Research) posted a surprise quarterly profit, versus analysts' expectations for a loss, sending shares higher in extended-hours trading. The chipmaker attributed the stronger than expected quarter to stronger demand for high margin products such as image sensors and flash memory.
What moved?
A technology rally fueled the Nasdaq's advance with a variety of stocks participating.
Intel (up $0.53 to $24.48, Research) led the list of chip gainers on the session, boosting the Philadelphia Semiconductor (up 7.10 to 466.36, Charts) index by nearly 1.6 percent.
eBay (up $2.34 to $41.27, Research) and Yahoo! (up $1.08 to $33.43, Research) were among the web names firing up the Goldman Sachs Internet (Charts) index.
Homebuilders were stronger across the board, with the Dow Jones Home Construction (unchanged at $948.13, Research) index adding 2.5 percent.
In corporate news, Red Hat (up $4.93 to $21.44, Research) reported higher quarterly earnings and revenue late Wednesday that beat estimates, on increased demand for its Linux software. Shares jumped nearly 30 percent Thursday in active Nasdaq trading.
On the downside, shares of Research in Motion (down $7.45 to $69.80, Research) slipped 9 percent despite the company's improved quarterly earnings and forecast. The company makes the BlackBerry wireless device.
Market breadth was positive. On the New York Stock Exchange, winners beat losers by around 11 to five on volume of 1.63 billion shares. On the Nasdaq, advancers topped decliners more than three to two on volume of 1.83 billion shares.
A pair of economic reports released in the morning were fairly upbeat, but neither reflected the full impact of Hurricanes Katrina and Rita.
Weekly jobless claims plunged by a greater-than-expected 79,000 last week, but do not fully incorporate the fallout from Rita.
Meanwhile, the government said that gross domestic product growth in the second quarter grew at a 3.3 percent annualized pace, unchanged from an earlier read and in line with forecasts.
U.S. light crude oil for November delivery rose 44 cents to settle at $66.79 a barrel on the New York Mercantile Exchange.
Natural gas for November delivery rose 10 cents to $14.20 per million British thermal units. (For more on the threat of higher natural gas prices, click here.)
Treasury prices slipped, raising the yield on the 10-year note to about 4.29 percent from 4.25 percent late Wednesday. Treasury prices and yields move in opposite directions.
The dollar gained modestly against the euro and yen.
COMEX gold rose $2.70 to settle at $475.80 an ounce.
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