Stocks staged a late rally to finish with solid gains in a quiet post-holiday session yesterday that saw investors wrestle with economic data that painted a mixed picture for stocks.

The data, which showed US manufacturing activity in December increased at a slower-than-expected pace, buoyed sentiment in the inflation-wary bond market and sent interest rates to their lowest levels in more than four years.

But equity investors took a mixed view of the data, which suggested a tempering of US economic growth.

The Dow Jones industrial average finished at a session-high 7,965.04, up 56.79 points, while the Nasdaq Composite rose 11.17 to 1,581.52.

In the broader market, advancing issues outpaced losers by a margin of eight to seven on New York Stock Exchange volume of 370 million shares.