New York ? Wall Street got off to a strong start in 2003 as the Dow climbed more than 250 points Thursday on news of an unexpected surge in U.S. manufacturing.

“We got a positive manufacturing report and that really was a turn-on,” said Larry Wachtel, market analyst at Prudential Securities.

The market was cheered by news that U.S. manufacturing grew in December for the first time in four months. The Institute for Supply Management said its index of business activity rose to 54.7 in December from 49.2 in November. A reading above 50 indicates manufacturing is growing; a reading below 50 signals contraction.

Analysts had forecast a reading of 50.1 for the month. The last time the index was above 50 was August.

“The manufacturing sector rebounded in December,” said Norbert J. Ore, who oversees the group’s monthly survey. “The question at this point is whether the manufacturing sector can continue to gather momentum during the first quarter of 2003.”

Ore said the sudden jump in activity remained difficult to explain.

The news came as the Labor Department reported the number of newly laid-off Americans filing claims for unemployment benefits rose by 13,000 last week to 403,000 after declining for two consecutive weeks. The number was in line with analysts’ expectations.

Also Thursday, President Bush said he would unveil an economic-stimulus package next week, one that would benefit all Americans.

The Dow closed up 265.89 points, or 3.2 percent, at 8,607.52, according to preliminary calculations. It was the index’s biggest one-day gain since Oct. 15, when it rose 378.28.

The broader market was also sharply higher. The Nasdaq composite index rose 49.34, or 3.7 percent, to 1,384.85 after falling 31.5 percent last year and 66.9 percent in the past three years.

The Standard & Poor’s 500 index advanced 29.21, or 3.3 percent, to 909.03, after last year’s loss of 23.4 percent and a three-year drop of 40.1 percent.

Some of the purchasing and supply executives surveyed for the manufacturing index reported an increase in new orders for their products during December. But a number still see little if any rebound, and fears of a war with Iraq appear to be holding back business.

The index was pushed higher in large part by surge in new orders, and an increase in production.

Of the 20 industries surveyed, 11 reported growth, including food, leather, instruments and photographic equipment, and printing and publishing.

The manufacturing index is based on a survey of executives who buy the raw materials for manufacturing at more than 350 companies.

The Tempe, Ariz.-based group was formerly known as the National Association of Purchasing Management.