US stocks close higher

Investors have maintained their enthusiasm over lower US interest rates.

A positive economic report helped Wall Street to extend the large advance it made on Wednesday, when investors bought up shares in response to the Federal Reserve's decision on Tuesday to lower interest rates by 0.5%.

The Dow Jones industrial average closed up 32.66 at 11,248.58, the Nasdaq composite index advanced 27.24 to 2,193.68, and the Standard & Poor's 500 index moved up 3.50 to 1,288.49 .

The Dow's moderate gain followed the 342-point climb it made on Wednesday when the blue chip average closed above 11,000 for the first time since September 14.

With five interest rate cuts so far this year, investors and market analysts are increasingly hopeful that the economy and earnings will turn around in the second half of 2001.

A key economic report out today increased optimism that the US economy is starting to recover. The Conference Board's Index of Leading Indicators, an important gauge of future economic activity, rose 0.1% in April, gaining after two consecutive monthly declines.

Among the gainers were companies that posted better-than-expected earnings. K-mart advanced 45 cents at $10.58 after announcing it lost 2 cents a share in the first quarter, 5 cents less than Wall Street expected.

Hewlett-Packard, which beat earnings forecasts on Wednesday by 3 cents a share, rose sharply, up $4.16 at $30.90.

Investors also bid up some major industrial shares - which stand to benefit as the economy strengthens - like Boeing, up $2.04 to $68.79.

Another sign of investors' resurgent optimism could be seen in what issues they sold, including stocks in so-called defensive sectors like consumer products. Procter & Gamble fell $1.14 to $67.15.