The Dow Jones transports closed at an all-time high on Thursday, leading U.S. stocks higher and signaling more gains due to its role as a touchstone of economic demand.

The Dow Jones Transportation Average <.DJT> rose 1.2 percent to 5,510.06, led by Norfolk Southern , which jumped 8 percent to $73.87 after reporting strong results.

Investors had expectations for strong gains after the S&P 500 broke through resistance at 1,344 on Tuesday. However, with volume weak and economic data suggesting a still unsteady path to recovery, it raises questions as to how fast the S&P can surpass the next milestone at 1,400.

There is a disconnect in the market right now -- we are getting this mixed bag of news, said Jonathan Corpina, head of NYSE floor operations for Meridian Equity Partners in New York.

There were also some signs of creeping cost pressures in some companies' results. Procter & Gamble Co

lowered the high end of its profit forecast as it trimmed expenses and increased prices to offset rising materials costs. Its shares were up 0.8 percent at $64.50.

Earnings eased the blow from a batch of soft economic data showing U.S. economic growth had slowed and the labor market may be weakening.

But the U.S. Federal Reserve has maintained support for its easy monetary policy, which has helped push up equity prices in the face of increasing inflation.

As operating costs continue to move higher across the board, that is clearly going to affect the bottom line moving forward, Corpina said.

Seeing commodity prices, oil and energy prices at the rate they are trading at now, with no end in short-term sight, that has to be factored in, going into the next quarter or two.

The Dow Jones industrial average <.DJI> rose 72.35 points, or 0.57 percent, to 12,763.31. The Standard & Poor's 500 Index <.SPX> added 4.82 points, or 0.36 percent, to 1,360.48. The Nasdaq Composite Index <.IXIC> advanced 2.65 points, or 0.09 percent, to 2,872.53.

RIMM DIVES LATE, MICROSOFT DROPS

After the closing bell, U.S.-listed shares of Research in Motion tumbled 10 percent to $50.94 after the BlackBerry maker cut its earnings outlook for the current quarter, while Microsoft Corp shed 2 percent to $26.19 after posting quarterly earnings.

During the session, insurers moved higher as Allstate Corp , up 5.7 percent at $33.76, and Aflac Inc , up 5 percent at $57, advanced on quarterly results. Health insurer Aetna gained 4.2 percent to $41.48 following quarterly results that topped Wall Street's expectations.

The KBW insurance index <.KIX> climbed 2 percent and the Morgan Stanley healthcare payor index <.HMO> added 1.9 percent.

We are kind of getting in that stage where we've had a lot of good earnings reports. The market really likes that, but as we are getting through earnings season, they are going to start focusing more on these economic numbers, said Peter Jankovskis, co-chief investment officer of OakBrook Investments LLC in Lisle, Illinois.

The fact we've had this string of economic numbers that are at par, sub-par, however you want to put it, is going to cause people to be looking more at the individual companies. It's not 'a rising boat lifts all ships story' any more.

Silver soared to an all-time high and gold rose to another record, as a falling dollar and signs that the Federal Reserve would maintain a loose monetary policy boosted precious metals' appeal as a hedge against inflation and economic uncertainty.

Other economic data showed pending sales of existing U.S. homes were much stronger than expected in March, offering faint glimmers of hope for the depressed U.S. housing market.

Volume was modest, with about 7.49 billion shares traded on the New York Stock Exchange, NYSE Amex and Nasdaq, slightly below the daily average of 7.73 billion.

Advancing stocks outnumbered declining ones on the NYSE by 1,838 to 1,144, while on the Nasdaq, advancers beat decliners 1,437 to 1,129.

(Reporting by Chuck Mikolajczak; Editing by Jan Paschal)