The stock market posted strong gains today, as investors celebrated the U.S. Commerce Department's report that consumer spending increased 0.5 percent to a record high in March, boosted by spending on autos and other durable goods.

The level of consumer spending surpassed the pre-recession peak set in November 2007.

With spending growing much faster than incomes in March, the personal savings rate fell to 2.7 percent, the lowest since September 2008. The savings rate had peaked at 6.4 last May at the height of the federal stimulus.

After-tax, inflation-adjusted incomes increased 0.2 percent in March.

Meanwhile, construction spending rose in March for the first time in five months, but all the strength came in government activity, as private sector building fell to its lowest level in a decade. The Commerce Department said construction activity increased by 0.2 percent in March, its first advance since last October.

Meanwhile, U.S. manufacturing factory activity expanded at its fastest pace in nearly six years, according to a report from the Institute for Supply Management, a trade group of purchasing executives. The ISM said its manufacturing index rose to 60.4 in April from 59.6 in March, marking the ninth consecutive month of growth. A level above 50 indicates expansion.

In Detroit, General Motors Co. reported today that its April U.S. sales grew 6.4 percent to 183,997 cars and trucks from 173,007 in the same month a year ago, and Ford Motor Co. reported that its April sales jumped 24.7 percent to 167,542 vehicles.

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The stock market reacted favorably to the strong economic data today and the news that UAL, the parent company of United Airlines, will acquire Continental Airlines. The merged company will form the world's largest airline and will be based in Chicago.

The Dow Jones Industrial Average soared by more than 100 points this morning. Local stocks in the BizTimes Stock Index joined in today's rally, led by Kohl's Corp. (up $1.17 to $56.18) and Rockwell Automation Inc. (up 99 cents to $61.76). The largest local decliners this morning were Bucyrus International Inc. (down $2.53 to $60.36) and Joy Global Inc. (down $1.63 to $55.17).