US stocks staged a late rally today after spending most of the day weighed down by an unexpected rise in the unemployment rate.

The Dow Jones industrials set a new high today as stocks extended their gains for a second day after Federal Reserve Chairman Ben Bernanke told a Senate panel the economy should grow modestly this year despite a slowdown in housing and that he expects inflation will continue to ease.

Wall Street managed a tiny gain today, enough to give the Dow Jones industrial average another record close, after the Federal Reserve stoked some fears of inflation pressures but implied that it is not intent on raising interest rates.

US consumer spending rose in August for a fourth month as cash gained from reduced income tax withholding rates helped boost purchases at stores and auto dealerships, a government report showed.