Analysts said the advance was yet another indication of the market’s improving mood, but they also cautioned that the approach of earnings reporting season could make it difficult for Wall Street to have more significant advances.

According to preliminary calculations, the Nasdaq closed up 26.45, or 1.4 percent, at 1,909.55. The Nasdaq, the most battered of the market’s major indexes during Wall Street’s three-year slump, last closed higher on March 11, 2002, when it stood at 1,929.49.

The Dow advanced 113.48, or 1.2 percent, to 9,659.13, its first close above 9,600 since June 18, 2002, when the average was at 9,706.12.

The S&P 500 index rose 13.61, or 1.3 percent, to 1,039.58, its best finish since June 5, 2002, when the index was at 1,049.90.

Investors today were cheered by news that the Index of Leading Economic Indicators, a closely watched gauge of future economic activity, rose 0.4 percent in August to 113.3. The figure was in line with analysts’ expectations, and followed a revised 0.7 percent increase in July, but the assessment by the Conference Board also showed the current business climate had stalled.

Wall Street also was pleased by a Labor Department report that new claims for jobless benefits fell by a seasonally adjusted 29,000 to 399,000 for the work week ending Sept. 13. It was the lowest level of claims since the week ending Aug. 23, and marked the first time since then that claims dipped below the 400,000 mark.

"We’ve got some decent economic data," said Tim Smalls, a trader at SG Cowen Securities. "The jobless claims were a little better than expected and the leading indicators were right in line with expectations. That’s benign enough for the market to move higher."

Stocks have been gradually trending up for months now. Subodh Kumar, chief investment strategist for CIBC World Markets, said the moves suggest the market is becoming more resilient, but third-quarter earnings reports, which are due out next month, will be key in whether the upward trend continues.

"The market is expecting earnings to meet (analysts’) consensus," Kumar said. "If earnings exceed expectations, that could send prices higher. I think that if the S&P 500 during this earnings season were to cross up to the 1,075 level, that would be too much ahead. And there could be the potential for pullback."

German pharmaceutical maker Bayer surged $1.33, or 6 percent, to $23.63 on news a federal judge had denied class-action status to several thousand lawsuits against the company over its anti-cholesterol drug Baycol.

Citigroup Inc. was up $1.71, or 3.8 percent, at $46.65 following Merrill Lynch’s decision to reinstate coverage of the stock with a "buy" rating.