updated 10/27/2006 9:22:18 AM ET 2006-10-27T13:22:18

Wall Street extended its rally Thursday, as robust earnings at Exxon Mobil Corp. and Aetna Inc. helped ground investors as they tried to reconcile divergent economic data.

Major Market Indices

The Dow Jones industrial average, lifted in part by component Exxon Mobil, had its fourth consecutive record high close. The generally upbeat earnings reports of the past two weeks have helped power the blue chips as well as the rest of the stock market; Thursday’s batch of earnings also helped investors digest a pair of government reports that suggested an economic soft landing might be harder to achieve.

The market was initially inspired by data that indicated capital spending jumped by the most in more than six years, but then fell on a report that showed new home prices plunged at its steepest pace since 1970. Investors were particularly wary after the Federal Reserve, which on Wednesday left interest rates unchanged , said it remains concerned about inflation even as the economy is slowing.

“Things on the horizon are becoming less and less visible,” said Hugh Moore, a partner with portfolio manager Guerite Advisors.

He said the economic reports point to a “slow, grinding deceleration,” but for the moment stock investors are trading on optimism. This contributed to Thursday’s erratic trading — stocks spent most of the session in negative territory before a late-day rally.

Further direction about the economy will come with Friday’s release of gross domestic product estimates.

The Dow Jones industrial average closed the seesaw day up 28.98 points, or 0.24 percent, while the broader Standard & Poor’s 500-stock index finished the day up 6.86 points, or 0.50 percent. So far this earnings season, the index’s components on average have reported double-digit earnings gains for the 18th consecutive quarter. The Nasdaq composite index added 22.51 points, or 0.96 percent.

Bonds rose on sentiment that economic indicators might lessen the likelihood of central bankers cutting rates early next year. The yield on the benchmark 10-year Treasury note fell to 4.72 percent from 4.76 percent late Wednesday. The dollar was mixed against other major currencies, while gold prices rose.

A barrel of light, sweet crude fell $1.04 to $60.36 on the New York Mercantile Exchange. Crude advanced on Wednesday after a report showed an unexpected drop in inventories.

Scott Wren, equity strategist for A.G. Edwards & Sons, said both the bond and stock markets should get a much clearer picture of the economy on Friday, when the Commerce Department will release its third-quarter gross domestic product estimates.

“There’s mixed economic data out there that’s not telling you one thing or another, its not telling you to take the markets higher or lower,” he said. “There’s still some uncertainty over what the Fed is thinking, but (Friday) you’ll get a pretty pure read with GDP.”

Higher oil prices throughout most of the third quarter helped Exxon Mobil report a profit of $10.49 billion during the period , the second largest quarterly profit ever for a U.S. company. The average market price for crude held at around $70 a barrel in the period after peaking above $78 per barrel in July.

The company’s shares rose 61 cents to $71.62.

Aetna spiked $2.86, or 7.4 percent, to $41.39 after the health insurer reported a 28 percent increase in third-quarter profit. The Hartford, Conn.-based company also boosted its guidance for the full year.

Media company Clear Channel Communications Inc. said a group of private equity firms approached it about a possible takeover. Shares jumped $3.13, or 9.7 percent, to $35.48.

Microsoft Corp. reported after the markets closed that its fiscal first-quarter profit surpassed Wall Street projections . However, the software maker’s expectations for the second quarter fell flat. Shares rose 4 cents to close at $28.35, but fell 10 cents in after-hours electronic trading.

Symantec Corp. shares fell $1.29, or 6.2 percent, to $19.49 after the maker of Internet security products said its earnings fell shy of Wall Street projections during the third quarter. The company said it had disappointing sales in Europe.

Red Hat Inc. shares plummeted $4.68, or 24 percent, to $14.83 after rival Oracle Corp. said it will offer low-cost technical support for Red Hat’s Linux software. Oracle rose 10 cents to $18.72.

Overseas, Japan’s Nikkei stock average closed up 0.67 percent. Britain’s FTSE 100 was down 0.48 percent, Germany’s DAX index rose 0.31 percent, and France’s CAC-40 was up 0.21 percent.

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