Blue-chip stocks closed slightly higher as the bulls pulled in their horns in the absence of major economic news to build on the previous session's record gains. But a weak bond market and a bout of late-session profit-taking tempered the advance. In the broader market, advancing issues outnumbered declines 17 to 10 on active volume of 550 million shares on the New York Stock Exchange.

The Nasdaq Composite closed up 0.14 of a point at 1,618.23. The Dow was up 68 points in a late-day rally before profit-taking cut into the gain.

"We've got good buying follow-through from yesterday. The NAPM report set a good tone and gave us a leveraging device as bargain-hunters returned from their holidays," said Mr Tom Carpenter, chief economist of ASB Capital Management. Analysts also said many investors were waiting on the sidelines for tomorrow's highly-anticipated employment report.