STOCKS spurted to record territory in late trading extending earlier modest gains, as bond prices improved. The Dow Jones broke through its record closing high set on Monday.

Bonds paved the opening for stocks to run higher. Stocks had paused on Tuesday as strong consumer spending rekindled inflation fears in the bond market, sending interest rates higher. But stocks were pushed higher yesterday by investors buying to cover short positions.

Advancing issues outnumbered decliners by about six to five on the New York Stock Exchange. The NYSE's composite index rose 2.64 to 363.69. The Standard and Poor's 500 stock index rose 5.65 to 678.41. The Nasdaq composite index rose 2.15 to 1,246.57.

At the American Stock Exchange, the market value index rose 2.76 to 614.99.