Stocks retreated from today's highs, but still posted healthy gains after strong economic news from several fronts indicated that the U.S. economy is doing much better than expected.
The Dow Jones Industrial Average which climbed as much as 164.78 points today, closed up 97.07 points, or 1.14 percent, at 8,592.1. The technology-heavy Nasdaq Composite Index rose 14.2 points or 0.81 percent, to 1,771.39.
The U.S. Commerce Department reported a 3.3-percent growth rate for the nation's third-quarter gross domestic product--much stronger than economists and analysts had previously expected.
The market was also boosted by news today that the Group of Seven (G7) leading industrial nations had proposed a range of measures that may help to head off future economic problems. The group also agreed to provide an additional $90 billion for the International Monetary Fund (IMF) to help bankroll a new financial safety net programs in order to help troubled economies.
Shares of telecommunications equipment maker Ciena continued to climb today on rumors that the company may again be an acquisition target, traders said.
In addition, indications that at least one large company was buying more of Ciena's equipment helped boost the stock, one analyst said. Ciena shares jumped 11.34 percent today to close at 17.19, and has been the most actively traded issue on the Nasdaq market since yesterday, with 26.1 million shares trading hands today.
3Com stock gained today after the company said that it predicts strong second-quarter sales. The stock was the third most active stock on the Nasdaq today with 18.2 million shares traded. Shares rose 5.1 percent to 36.06.
Macromedia shares shot higher after the Web software and design company yesterday reported record revenue of $35.2 million for the second quarter, a 21-percent increase from a year ago. The stock also got a boost after two investment banks reiterated their positive outlook for the company. Piper Jaffray maintains the stock at a "strong buy," while Sands Brothers repeated its "buy" rating. Shares in the company closed up 17.43 percent or 2.97 points, to 20, surpassing its 52-week high of 19.31.
Shares of Infoseek, however, plunged today after the company reported third-quarter earnings yesterday 2 cents lower than analysts' expectations, despite more than doubling its revenue from the same period a year ago. The stock fell 10.73 percent to 29.63.
Reuters contributed to this report.