Stocks rallied for a second straight session Thursday, boosted by late-January portfolio additions and new data indicating that the US economy has begun to recover from its slowdown.

The Dow Jones industrials closed up 157.14 points (1.61 per cent) at 9,920.00, and the Nasdaq composite added 20.68 points (1.08 per cent) to 1,934.12.

The Standard and Poor's 500 index advanced 16.64 points (1.49 per cent) to end at 1,130.21.

Dealers said the market opened higher and extended its rise throughout the session, with the Dow closing at its intraday highs and with momentum continuing a day after the Federal Open Market Committee left rates unchanged on signs of economic strength but preserved the possibility of further reductions later in the year.

"My view is that the US recession is over, that November will be viewed as being the trough," Gail Fosler, senior vice president and chief economist at The Conference Board, said at the World Economic Forum here.

The market on Thursday drew additional support from a positive earnings report from Procter and Gamble, a monthly gain in the Chicago Purchasing Management Association index and late-January portfolio additions.

The Purchasing Management Association said its index of regional business activity rose to a seasonally adjusted 45.1 in January from a revised 41.5 in December.

A reading below 50 continues to signal a decline in economic activity, but the increase was larger than expected.

Dealers said that gains were limited during morning trade by concerns about fourth-quarter corporate profits, which overall have been mediocre, and the latest developments in the Enron case.

The fallout from the Enron matter continues to unnerve investors, who in recent sessions have nervously sold off shares of a number of corporations which are suspected of inaccurate accounting methods or improper executive conduct or are believed to be near bankruptcy.

Tyco International, which fell earlier in the

week amid concerns about its liquidity and accounting, recovered as such fears began to ease.

Tyco closed up 30 cents at 35.15. Telecom McLeodUSA was halted in trade after it filed for Chapter 11 bankruptcy protection as part of a lockup agreement with bondholders as it seeks to reduce debt.

Procter and Gamble rose 3.39 to 81.68, lending support to the Dow index after it reported results above the First Call Consensus.

Delta Air Lines finished up three cents at 31.60 after the company said it anticipates that 2002 will be a year of recovery despite a big loss in the fourth quarter.

Disney closed down 34 cents at 21.06 ahead of its quarterly earnings report. The company later reported first-quarter profits above expectations.

On the bond market, the yield on the 10-year Treasury bond rose to 5.023 per cent from 4.996 per cent Wednesday, while the yield on the 30-year bond rose to 5.431 per cent against 5.426 per cent. Bond yields and prices move in opposite directions.