Oil prices rose to a third straight closing record high and metal prices advanced as the US dollar fell, driving up the shares of Chevron and Alcoa. These two stocks ranked as the biggest positive influences on the Dow.

Technology shares also exerted a major positive influence after a Merrill Lynch strategist said they were a good value.

The market's advance was limited, though, by financial shares. The sector fell for a second day on concerns that new disclosure requirements for investment banks, envisioned by the US Securities and Exchange Commission, may hurt bank profits.

Investors again took heart from fresh data suggesting the economy, while soft, was not crumbling rapidly.

'There's a shift in the overall sentiment, with people thinking that the US and the world's economies aren't in such bad shape,' said Mr Cleveland Rueckert, market analyst at Birinyi Associates in Stamford, Connecticut. 'So that means there's still going to be construction, demand for copper, raw materials, hence the strength in material stocks today.'

The Dow Jones industrial average finished up 52.43 points, or 0.41 per cent, at 12,866.78.

The Standard & Poor's 500 Index ended up 5.11 points, or 0.37 per cent, at 1,397.68.

The Nasdaq Composite Index gained 12.75 points, or 0.52 per cent, to close at 2,451.24. -- REUTERS