NEW YORK – Wall Street extended its record-setting advance Monday, sending the Dow Jones industrial average within a whisper of 12,000 as investors grew more optimistic that corporate profits will remain robust amid a slowing economy.
The Dow closed up 20.09, or 0.17 percent, at 11,980.60. In the final hour of trading, the index reached a record trading high of 11,997.25.
Broader stock indicators also advanced. The Standard & Poor's 500 index rose 3.43, or 0.25 percent, to 1,369.05, and the Nasdaq composite index rose 6.55, or 0.28 percent, to 2,363.84.
Bonds rose, with the yield on the benchmark 10-year Treasury note dipping to 4.78 percent from 4.80 percent Friday. The dollar was mixed against other major currencies, while gold prices rose.
The blue chip index was less than 3 points away from reaching the milestone for the first time, then fell back minutes before the close; it still managed a record high finish, its seventh in two weeks. A deluge of earnings reports, including 12 from Dow component companies slated this week, could make or break the Dow's three-week run at record levels.
The advance came despite a sharp rise in energy prices, with natural gas having its biggest increase since July. Light, sweet crude closed up $1.37 at $59.94 on the New York Mercantile Exchange.
Although the overall market has been going up along with the Dow, a trend that points to investors' rising optimism, analysts said the blue chips' record highs also show some need for safety.
"People are arguing at what pace and severity the economy is slowing," said J. Michael Barron, chief executive of Knott Capital. "Those are markets where traditional, big cap stocks tend to outperform. I think the underlying reason the Dow is moving higher is that people are uncertain as to what's happening right now, and the safer bet is to go with global brands."
But Michael Sheldon, chief market strategist at Spencer Clarke LLC, said the Dow's rise benefits the rest of the market.
"The biggest impact from the Dow is that it starts to increase investor interest in equities in general, and we might see more investors that have been waiting on the sidelines put money to work in the market," he said.
So far, early indications of how companies fared during the third quarter have been mixed. Wachovia Corp.'s (WB) reported profit rose 13 percent, but revenue missed projections. Toy maker Mattel Inc. (MAT) topped Wall Street projections, while Charles Schwab Corp. posted a strong profit on lighter-than-expected revenue.
There was little reaction after St. Louis Federal Reserve President William Poole said in a speech that "draconian" action won't be needed to control the economy if inflation ebbs. Wall Street was also relieved that Fed Chairman Ben Bernanke stayed away from the economy in a speech Monday, and instead spoke on regulatory burdens in efforts to battle terrorist financing.
UnitedHealth Group Inc. fell after it reported Sunday that Chief Executive William McGuire will leave the company by Dec. 1 under scrutiny over backdated stock options. The nation's second-largest health insurer faced an independent report that found widespread problems with the way the insurer issued stock options. Shares fell $1.21, or 2.5 percent, to $47.54.
Military and commercial vehicle maker Oshkosh Truck Corp. (OSK) announced it would acquire JLG Industries Inc., a maker of aerial work platforms and booms, for about $3 billion in cash. Oshkosh fell $3.05, or 5.5 percent, at $52.49, while JLG surged $6.81, or 32.8 percent, to $27.56.
Wachovia said stronger interest and fee income helped fuel profit during the third quarter, despite a challenging interest rate environment. Profit was in line with projections from analysts surveyed by Thomson Financial, but revenue missed expectations. Its shares fell $1.22, or 2.2 percent, to $55.25.
Mattel said strong sales of Fisher-Price products helped third-quarter profit rise 6 percent to top Wall Street expectations. Mattel added 60 cents, or 2.9 percent, to $21.30. Charles Schwab Corp., the nation's largest discount brokerage, reported quarterly profit surged 29 percent from a year ago on a rise in revenue from financial services products. However, the company's overall revenue came up lighter than expected. Its shares fell 46 cents, or 2.6 percent, to $17.10.
Advancing outpaced decliners by a 2 to 1 margin on the New York Stock Exchange, where consolidated volume came to 2.33 billion shares, compared with 2.48 billion traded Friday.
The Russell 2000 index of smaller companies advanced 6.83, or 0.90 percent, to 769.48.
Overseas, Japan's Nikkei stock average closed up 0.94 percent. Britain's FTSE 100 closed up 0.25 percent, Germany's DAX index added 0.21 percent, and France's CAC-40 rose 0.16 percent.