NEW YORK — A trifecta of good news — positive economic data, strong earnings and a sharp drop in oil prices — sent stocks sharply higher yesterday and lifted the Standard & Poor's 500 index to a four-year high. The Nasdaq composite index also moved into positive territory for 2005.

Wall Street was encouraged by the latest reading of the Labor Department's Consumer Price Index, which measures how much consumers pay at the retail level. The CPI was unexpectedly flat for June, while "core" CPI — with food and fuel costs removed — edged just 0.1 percent higher.

Record earnings from Apple Computer Inc. also cheered investors, while a sharp 1.7 percent jump in retail sales for June assuaged fears that high oil prices would crimp consumer spending.

"I was very pleasantly surprised by the releases today, with low inflation and very strong retail sales growth. And in general, second-quarter earnings are off to a very strong start," said Lincoln Anderson, chief investment officer at LPL Financial Services. "This is just unalloyed good news, and no dark spots in there that I can see."

Despite the advance, the major indexes pulled back from session highs as investors collected profits. The indexes have risen between 3 percent and 4 percent over the last six trading days.

"We're holding on, for the most part, but I think there's been some profit-taking that's kept us from going much higher," said Brian Williamson, an equity trader at The Boston Co. Asset Management.

Declining issues outnumbered advancers by about 8 to 7 on the New York Stock Exchange, where consolidated volume came to 2.42 billion shares, compared with 1.88 billion Wednesday.