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A jump in consumer spending delighted investors today and gave stocks a big boost in light pre-holiday trading.

Investors have been paying close attention to news about consumers, whose spending accounts for two-third of the economy and who retailers are counting on for a decent holiday shopping season.

Today's encouraging consumer spending news helped investors shake off their disappointment from the previous session when they were irked by a weaker-than-expected reading on consumer sentiment.

At 1 p.m., the Dow Jones industrial average was up 230.51, at 8,906.93 after dropping 172.98 in the previous session.

The broader market was also higher. The Nasdaq composite index rose 42.86, to 1,487.29, having fallen 37.47 on Tuesday. The Standard & Poor's 500 index advanced 24.58, to 937.89, following Tuesday's loss of 19.57.

Trading was light ahead of Thursday's Thanksgiving holiday, when the market will be closed. The market will be open for a half day on Friday.

Today's gains followed a report from the Commerce Department saying consumers ratcheted up their spending by 0.4 percent in October. It was the biggest increase in three months, and an improvement over September's 0.4 percent dip.

Stocks rose after the Labor Department reported that new claims for state unemployment insurance fell to 364,000 last week from a revised 381,000. The average forecast of economists surveyed by Bloomberg News was an increase to 385,000.

Shares extended gains as a Commerce Department report showed durable-goods orders rose for the first time in three months during October.

Also, a National Association of Purchasing Management-Chicago report showed factory activity in the Chicago area unexpectedly rose in November after contracting the previous two months.

"Perception that the economy is turning around is driving the market," said Brad Brooks, who helps manage $6 billion at Value Line Asset Management. "The weekly unemployment claims were lower than expected, so people are looking at that positively."

Retailers traded higher on the consumer spending report. Best Buy rose 80 cents to $26.42 and Target advanced 44 cents to $34.02.

Technology also enjoyed solid gains. For nearly two months, the tech sector has fared the best in Wall Street's rallies, a sign that investors are growing more confident about the economy's progress.

Microsoft rose 60 cents to $57.50 and Cisco Systems climbed 34 cents to $14.79.

IBM climbed $2.19 to $87.25, and Chartered Semiconductor Manufacturing's U.S. shares added $1.89 to $6.89. The provider of made-to-order chips agreed to share computer-chip plants with IBM, the world's biggest computer maker, to save money and fill unused factory capacity.

Michaels Stores Inc. jumped $1.50 to $36.40. The arts-and- crafts retailer earned 46 cents a share in the third quarter ended Nov. 2, 6 cents more than the First Call consensus.

General Motors Corp. added $1.24 to $38.90. The world's biggest carmaker said its Saab unit will cut 1,300 jobs, or about 20 percent of its Swedish workforce, in a bid to return to profitability.

Dollar General Corp. fell $1.66 to $12.40. The discount retailer said third-quarter earnings were 16 cents a share, excluding certain costs. On that basis, the average of analysts surveyed by First Call was 18 cents. Fourth-quarter profit will rise at the low end of its forecast of 13 percent to 15 percent, Dollar General said.

Eli Lilly gained $2.33 to $66.33. Strattera is the first new medication for attention-deficit and hyperactivity disorder to win approval in 30 years, the Food and Drug Administration said. The drug may have annual sales of as much as $750 million, said Robert Hazlett, an analyst at SunTrust Robinson Humphrey.

Transkaryotic Therapies Inc. plunged $5.54 to $8.72. The biotechnology company said a preliminary review of its Replagal enzyme-replacement therapy for Fabry Disease didn't show a statistically significant difference between treated and placebo patients.

Genzyme Corp., which is developing a competing treatment, climbed $2.30 o $32.44.

Advancing issues outnumbered decliners more than 4 to 1 on the New York Stock Exchange. Trading volume was light at 769.53 million shares, below 949.66 million at the same point Tuesday.

The Russell 2000 index, which tracks smaller company stocks, rose 8.02, or 2 percent, to 406.34.

Overseas, Japan's Nikkei stock average finished today up 0.6 percent. In Europe, France's CAC-40 rose 3.1 percent, Britain's FTSE 100 gained 1.8 percent and Germany's DAX index advanced 4.3 percent.

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