The Dow Jones industrial average finished above 13,000 Tuesday after struggling to close above the barrier for a week.
Consumer confidence jumped in February to the highest level since a year ago. Improved perceptions of the job market pushed the index higher, but the number is still below the level that indicates a healthy economy.
The report, issued at 10:00am Tuesday morning, pushed the Dow Jones industrial average above 13,000, a marker it has broken through repeatedly in the past week during the trading day.
According to preliminary reports, the benchmark Dow index rose 32 points to 13,013. The broader Standard & Poor's 500 index rose 3 points to 1,371, and the Nasdaq composite index rose 18 points to 2,984.
The Dow hadn't closed above 13,000 since May 2008.
The gains were broad. Only two of the 10 industry sectors tracked by the S&P 500 fell, utilities and industrial companies. Technology stocks rose the most. Microsoft Corp. (MSFT) and Intel Corp. (INTC) were the biggest gainers among the 30 stocks that make up the Dow average.
The Dow's New Year's rally has faded since the index first cracked the 13,000 milestone last week. It has been trading sideways after gaining 6.5% in the first two months of the year. The S&P 500 rose 9.1% in that time, the Nasdaq 14.6%.
Ryan Detrick, senior technical strategist with Schaeffer's Investment Research, said the index often loses momentum after hitting a big, round number, as short-term excitement about the market's rise gives way to more thoughtful analysis.
The Dow has dropped by an average of 0.4% in the two weeks after hitting a 1,000-point increment, according Detrick's research on the past 39 such events. The Dow typically gains 0.3% over a two-week span.
Detrick believes stocks will keep rising this year as growing economic optimism and market stability draw billions back into the stock market. He said retail investors and hedge funds have invested too little in stocks - a threat to their performance if stocks rise faster than other investments.
"Two months ago, we were talking about a double-dip recession; now consumer confidence is growing," Detrick said. "A major milestone like 13,000 wakes up a lot of investors who have missed a lot of this rally."
Earlier economic reports were weaker, pushing stock futures lower and leading to a mixed open.
Orders for long-lasting manufactured goods plunged last month by 4%, the most in three years, the Commerce Department said. Economists expected a 1% drop.
Much of the decline came from a pullback in business spending on machinery and equipment in January. Spending surged in that category late last year, before a key tax break expired. It fell last month by the most in a year.
The Standard & Poor's/Case-Schiller index of home prices fell in December for a fourth straight month in most major U.S. cities.
Major European indexes edged lower after rising for most of the day. A dip in oil prices had helped relieve some jitters that high energy costs could strangle the nascent recovery.
Crude oil was down a quarter-percent at $108 a barrel. Oil had spiked in recent weeks over concerns about a nuclear showdown with Iran. A report on weaker demand in Asia helped reverse oil's rise.
Among stocks making big moves:
Home builder Hovnanian Enterprises Inc. (HOV) rose 1% after saying its first-quarter contracts climbed 27% and February's numbers remained strong.
Auto parts retailer AutoZone Inc. (AZO) gained 2.4% after saying its profits increased 13% in the most recent quarter.
Domino's Pizza Inc. (DPZ) surged 10% after its fourth-quarter profit spiked 28%.