Stocks added to the gains from the previous session after better-than-expected retail and housing numbers helped boost confidence in the economy. However, caution ahead of today’s monthly payroll data restrained traders from making big moves. As traders chose to play it safe, volume dipped sharply.

The Dow Jones industrial average rose 51 points, or 0.5%, to 10,320.10. The blue-chip average had jumped 254 points on Wednesday on better-than-expected manufacturing reports in China and the U.S. The Standard & Poor’s 500 index advanced 10 points, or 0.9%, to 1,090.10, while the Nasdaq composite index climbed 23.17, or 1.1%, to 2,200.01. On the New York Stock Exchange, about two stocks advanced in price for everyone that fell.

Since employment, housing and consumer spending have been the areas that have had the greatest bearing on investors’ sentiments, a better-than-expected reading on these fronts helped relieve concerns that the pace of the recovery is faltering. A slightly less than expected rise in factory orders failed to stem the gains, with the miss largely attributed to prior months’ revisions.

Gains were broad based, with 24 of the 30 DJIA components closing the day in the green. Leading the gainers were Boeing (NYSE:BA), 3M (NYSE:MMM) and Home Depot (NYSE:HD). All but one of the S&P 500 industry sectors managed gains on the day.

Meanwhile, the European Central Bank’s decision to keep a key interest rate unchanged was welcomed by investors. Gold prices advanced $5.20 to $1251.50. Treasury prices fell, sending corresponding yields higher. The yield on the 10-year note jumped to 2.63% from 2.58% late Wednesday.

Shares in 3Par (NYSE:PAR) advanced 2.5% to $32.87 after Hewlett-Packard raised its bid for the data storage firm to $33 per share, overtaking Dell’s (NASDAQ:DELL) $32 per share offer. Burger King (NYSE:BKC), which is being taken private by investment group 3G Capital, soared $4.72, or 25%, to $23.58. The investment group has offered $3.26 billion, or $24 per share, for the fast-food chain.

The housing report showing a surprise rise in July pending home sales strengthened shares in homebuilder companies. Beazer Homes (NYSE:BZH) up 7.1%, DR Horton (NYSE:DHI) up 2.5%, and PulteGroup (NYSE:PHM) up 2.4%. Home improvement retailers also advanced on the news, with Lowe’s (NYSE:LOW) up 3.3% and Home Depot (NYSE:HD) rising 2.6%.

Better-than-expected same-store sales number also indicated consumers were slowly beginning to open their wallets. Same-store-sales rose 3.5%, bettering estimates of a 2.8% advance. Retail shares rallied, with BJ Wholesale (NYSE:BJ) up 2.9% and Dollar General (NYSE:DG) up 2.4%. Among teen-sellers, American Eagle (NYSE:AEO) rose 5.5% and Urban Outfitters (NASDAQ:URBN) 4.5%. Among department stores, Saks (NYSE:SKS) climbed 10.8% despite its 0.9% sales drop, Nordstrom (NYSE:JWN) rose 8.1% and Dillard’s (NYSE:DDS) gained 3.5%.

BOEING CO (BA): Free Stock Analysis Report
BURGER KING HLD (BKC): Free Stock Analysis Report
BEAZER HOMES (BZH): Free Stock Analysis Report
DELL INC (DELL): Free Stock Analysis Report
D R HORTON INC (DHI): Free Stock Analysis Report
HOME DEPOT (HD): Free Stock Analysis Report
HOME DEPOT (HD): Free Stock Analysis Report
LOWES COS (LOW): Free Stock Analysis Report
3M CO (MMM): Free Stock Analysis Report
3PAR INC (PAR): Free Stock Analysis Report
PULTE GROUP ONC (PHM): Free Stock Analysis Report
Zacks Investment Research