NEW YORK — Stock prices staged a broad rally Thursday, spurred on by favorable economic news and a strong bond market.
Several prominent stocks also got a boost from positive third-quarter earnings reports.
The Dow Jones average of 30 industrials climbed 26.58 to 1,834.93. Volume on the New York Stock Exchange stepped up to 150.94 million shares from 113.99 million on Wednesday.
Before the market opened, the Commerce Department reported that new factory orders for durable goods increased 4.9% in September, their biggest gain since November, 1984.
The news came as a surprise to Wall Streeters who have been skeptical about the prospects for a pickup in business activity.
At the same time, traders apparently were pleased that the bond market, which has recently been acting leery of any signs of a quickening economy, took the news in stride.
Prices of long-term government bonds, which move in the opposite direction from interest rates, rose more than $5 for every $1,000 in face value.
The separate report from the Labor Department of a 0.3% rise in the consumer price index last month was closely in line with expectations, analysts said.
Ford Motor gained 3 7/8 to 59 1/8 as the company reported third-quarter earnings of $2.61 a share, up from $1.13 in the comparable period a year ago. Other auto issues also advanced despite lower profit figures for the July-September period. General Motors rose 1 7/8 to 70, and Chrysler rose 1 1/8 to 37 3/4.
Minnesota Mining & Manufacturing, which posted higher quarterly earnings, picked up 3 3/8 to close at 108 1/2.
Du Pont, which like Minnesota Mining is a component of the Dow Jones industrial average, gained 2 to 82. The company posted third-quarter profits of $1.42 a share, up from $1.13 in the like period last year.
Lear Siegler jumped 8 to 75. The company said it had retained an investment banking firm to advise it on a possible restructuring or other action.
Japanese stocks posted some of the day's standout gains as the Tokyo market rebounded sharply from a recent selloff. Sony rose 2 3/4 to 23 1/2, Kyocera climbed 4 7/8 to 55 7/8, Matsushita Electrical rose 8 3/4 to 117 3/4, TDK rose 4 to 53 3/4 and Hitachi rose 4 5/8 to 66 7/8.
On the downside, M-A-Com fell 1 3/4 to 12 5/8. The company said earnings from continuing operations in its fiscal quarter ended Sept. 27 were below the results for the preceding quarter.
Advancing issues outnumbered declines by more than two to one on the Big Board, with 1,093 up, 485 down and 400 unchanged. A total of 2,990 blocks of 10,000 or more shares were traded on the NYSE, compared to 2,412 on Wednesday.
Also on Thursday, interest rates on 52-week Treasury bills edged down to 5.44% in the latest auction, the lowest level since August.
In the secondary market for Treasury bonds, prices of short-term governments rose 5/32 point, intermediate maturities rose 15/32 point and long-term issues were up 7/8 point, according to the investment firm of Salomon Bros.
In corporate trading, industrials and utilities rose 3/8 point in moderate trading.
Among tax-exempt municipal bonds, general obligations and dollar bonds also rose 3/8 point. Trading was moderate.
Yields on three-month Treasury bills were down 2 basis points to 5.27%. Six-month bills were unchanged at 5.35% and one-year bills were off 1 basis point at 5.47%.