The positive economic data was well received by Wall Street, a notable change from recent months when the buoyant economy made investors concerned over rising interest rates and the possibility of inflation. But it also calmed a market that only Wednesday was worried that the economy might be slowing too much.

Investors were also encouraged by a decline in weekly jobless claims and easing oil prices.

John Lynch, chief market analyst at Evergreen Investments, said interest rate jitters and inflation woes have largely worked their way through the markets, with investors finally focusing on positive fundamentals including strong consumption and business spending.

"The perception of bad stuff has been priced in," Lynch said. "Interest rates, oil prices, yes, they could serve to limit growth. But I think investors are really thinking that this is all priced in. It's a day of clarity."

The Dow Jones industrial average was up 95.31, or 0.9 percent, at 10,205.20. The Dow last closed above that level on May 6, and has risen 246.77, or 2.5 percent, since Monday's close.

Broader stock indicators were moderately higher. The Standard & Poor's 500 index was up 6.34, or 0.6 percent, at 1,121.28 and the Nasdaq composite index gained 8.35, or 0.4 percent, to 1,984.50. It was the best close for the S&P 500 since April 29, and the best for the Nasdaq since April 28.