NEW YORK — Wall Street surged higher yesterday, carrying the Russell 2000 to a record close as investors welcomed encouraging economic data and a continuation of double-digit corporate earnings growth. The Standard&Poor's 500 and Nasdaq composite indexes again reached their best closing levels in more than four years.

Investors embraced the Commerce Department's report that consumer spending rose 0.8 percent in June, the largest increase since April. Incomes also grew at a nice clip, which dovetailed with an improved jobs picture in June, when the unemployment rate fell to 5 percent, a nearly four-year low. Another Commerce Department report showed orders at U.S. factories rose 1 percent in June, in line with expectations.

Strong corporate earnings again drove stock prices. Earnings are on track to grow 10.74 percent for the second quarter.

As the market has recovered from its March 2003 lows, 84 percent of its gain has been attributable to higher corporate earnings, said David Darst, chief investment strategist of Morgan Stanley's Individual Investor Group.

"We're finally starting to see the markets wake up to the fact that the economy is in pretty good shape," said John Caldwell, chief investment strategist for McDonald Financial Group.

Advancing issues led decliners by nearly 2 to 1 on the New York Stock Exchange where preliminary consolidated volume was 2.05 billion shares, up sharply from 1.73 billion Monday.