U.S. stocks rallied Thursday, led by technology companies such as Apple Computer Inc. (AAPL) and IBM (IBM) as investors snapped up shares in recently beaten-down sectors, including health care and financials.

The Dow Jones industrial average climbed 91.97 points, or 0.82 percent, to end at 11,260.28. The Standard & Poor's 500 Index gained 15.62 points, or 1.23 percent, to finish at 1,285.71. The Nasdaq Composite Indexwas rose 40.98 points, or 1.88 percent, to close at 2,219.86.

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Weaker-than-expected economic data, including a government report that showed labor cost pressures were much better contained through the first quarter, also tempered fears about higher interest rates.

Both the Nasdaq and the S&P 500 each rose more than 1 percent as investors kicked off June's first trading session on firmer footing following a bruising May, in which the Nasdaq slid 6.2 percent and the S&P 500 registered its worst May in 22 years.

"We're seeing investors start to look at the U.S. market and look for value, particularly in areas that have been oversold, including technology," said Michael Malone, trading analyst at S.G. Cowen in New York.

"It also appears that investors are taking a little bit more cautious approach, with some money trickling into some names that are defensive in nature, like health care."

Thursday's rally pushed the Nasdaq back into the plus column for the year — up 0.7 percent for 2006. Last month's rout had briefly wiped out the Nasdaq's gain for the year.

Qualcomm Inc. (QCOM), which sells wireless technology licenses and chips, led the Nasdaq's advance, along with Apple, while Cisco (CSCO) was the S&P 500's top gainer.

Shares of Qualcomm shot up 4.1 percent, or $1.84, to $47.05, while shares of Apple, the maker of the highly popular iPod digital music player, rose 4 percent, or $2.40, to $62.17. Network equipment maker Cisco gained 4.2 percent, or 82 cents, to $20.50.

Shares of International Business Machines Corp., the world's biggest computer-services company, ranked fifth among the Dow's leading advancers as its stock gained about 1 percent, or 79 cents, to close at $80.69 on the New York Stock Exchange.

"Even though we are going through a little bit of a summer slowdown in technology, I think the path of earnings is still trending in the right direction," said Adam Tracy, director of listed trading at San Francisco investment bank Thomas Weisel Partners.

The closely watched index of semiconductor stocks rose 2.3 percent, its biggest daily percentage jump in almost two weeks.

A brokerage upgrade of U.S. telephone company AT&T Inc. (T) also added to the market's positive tone. Shares of AT&T advanced 3.3 percent, or 85 cents, to $26.91 on the NYSE after CIBC raised its rating on the stock. It was the Dow's third- biggest gainer and ranked fourth among the stocks that contributed to the S&P 500's climb.

Investors took advantage of the recent sell-off by buying shares of health-care companies such as Merck & Co. (MRK) and Pfizer Inc.(PFE), and financial services stocks such as JPMorgan Chase & Co. (JPM) — the Dow's biggest advancer — and Citigroup Inc.

An index of pharmaceutical stocks shot up 1.1 percent, while the S&P index of financial stocks rose 1.3 percent.

Shares of drugmaker Merck rose 1.5 percent, or 51 cents, to $33.80 on the NYSE, while those of rival Pfizer, the maker of Viagra, the anti-impotence drug, gained 1 percent, or 24 cents, to $23.90.

Shares of JPMorgan, the third-largest U.S. bank, rose 2.2 percent, or 94 cents, to $43.58, while shares of Citigroup, the world's largest financial services firm, finished up 1.1 percent, or 53 cents, at $49.83.

Industrial stocks, also beaten down recently amid worries that higher interest rates would slow economic growth, rebounded, with shares of aluminum producer Alcoa Inc., rising 2.7 percent, or 85 cents, to $32.57 on the NYSE. The stock was the Dow's second-biggest gainer.

But Wal-Mart (WMT) shares slipped 0.1 percent, or 6 cents, to $48.39 after the world's largest retailer said higher gasoline prices were hurting its customers' budgets, and as a result, it expects modest growth in its June sales.

Wal-Mart was one of only three stocks among the 30 Dow industrials that finished the session lower. Wal-Mart also bucked the trend of a good day for retailers, with most reporting higher-than-expected same-store sales.

Among the NYSE's leading net gainers was J.C. Penney Co. Inc. , up 6.6 percent, or $4.03, at $64.79 after it reported a surge in May same-store sales and raised its quarterly profit forecast.

Trading was active on the NYSE, with about 1.69 billion shares changing hands, above last year's daily average of 1.61 billion shares. On Nasdaq, about 2.18 billion shares traded, above last year's daily average of 1.80 billion.

Advancers outnumbered decliners on the NYSE by a ratio of more than 3 to 1, while on the Nasdaq, almost three stocks rose for every one that fell.

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