Despite two upbeat economic reports, prices fluctuated in a narrow range for most of the session. Analysts attributed the market’s tentativeness to concerns that an improving business climate already has been factored into Wall Street’s higher prices.

"The market is the greatest forecasting tool out there. Stocks have been forecasting these (economic) results," said Gary Kaltbaum, market technician for Investors’ Edge Partner, a money management firm in Orlando, Fla.

Trading was again affected by low volume, the result of many traders and investors being away on vacation.

"This week (before Labor Day) usually is just dismally slow. Trying to make something exciting about this week is tough," said Thomas F. Lydon Jr., president of Global Trends Investments in Newport Beach, Calif.

The day’s biggest winner was the Nasdaq composite index, which closed up 18.05, or 1 percent, at 1,800.18, according to preliminary calculations.

The Dow Jones industrial average advanced 40.42, or 0.4 percent, at 9,374.21. The Standard & Poor’s 500 index rose 6.05, or 0.6 percent, to 1,002.84.

Despite a slow week and erratic trading, today’s gains were the third in a row for the Nasdaq and S&P, something that analysts found encouraging — especially where the Nasdaq is concerned. Analysts said the market could have greater momentum when traders return from vacation.

"The Nasdaq keeps prodding along, and that is one thing that is going to be on the radar screens of most investors. As they come back from a long weekend and get re-engaged with their portfolios, they will realize the Nasdaq is at 16-month highs," Lydon said.

The Nasdaq has trended higher, while the Dow has lagged by comparison as investors move assets out of safer havens into riskier, growth-oriented sectors.

The Commerce Department reported that the U.S. economy grew at a 3.1 percent annual rate in the second quarter, stronger than previous estimates. The revised reading on gross domestic product showed the economy picking up at faster than the 2.4 percent growth rate the department projected a month ago.

The reading also was stronger than the 2.9 percent growth rate economists were expecting, and marked the economy’s best performance since the third quarter of 2002.

In a second report, the Labor Department said new claims for jobless benefits rose by a seasonally adjusted 3,000, to 394,000 last week. The fact that claims remained below 400,000, a level associated with a weak job market, offered hope that the pace of layoffs is stabilizing.

Investors weren’t that enthused about the data, however, having grown used to receiving one encouraging economic report after another. Analysts say it’s going to take even stronger numbers to keep investors buying stocks.

Better-than-expected earnings and brokerage house upgrades contributed to the day’s gains.