U.S. stocks rallied Monday, with the Dow average closing at another record high, buoyed by optimism about the spending outlook at Wal-Mart Stores Inc. (WMT) and the belief that falling gasoline prices will help boost consumer spending.

The Dow Jones industrial average climbed 114.54 points, or 0.95 percent, to end at 12,116.91, a record high. The Standard & Poor's 500 Index added 8.42 points, or 0.62 percent, to finish at 1,377.02. The Nasdaq Composite Index advanced 13.26 points, or 0.57 percent, to close at 2,355.56.

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Shares of Wal-Mart hit an 18-month high after the world's biggest retailer said it expects to slow its store expansion and spending growth next year in an effort to boost return on investment. Wal-Mart was the Dow's top gainer and among the major advancers in the S&P 500 Index.

Google Inc. (GOOG) rallied to a new all-time high of $484.64, following the the Web search company's quarterly profit report last week.

Sentiment also improved after the government said the U.S. retail price of gasoline fell to an average $2.23 a gallon, dropping for a record 10th week in a row.

"The rally seems to be going unabated as the month progresses," said Victor Pugliese, managing director and head of New York equity trading at First Albany Corp. "Investors see lower gasoline prices, retail stocks up, and with the holiday season just around the corner, this seems to be providing a good incentive."

The Dow earlier hit an all-time intraday high of 12,125.16. The S&P 500 hit 1,377.40, its highest level in almost six years.

Stocks have been on a gradual ascent since mid-July when major indexes began moving up from lows in May and June. Also, with crude prices falling, investors have grown optimistic that the decline could help consumer spending.

Shares of Wal-Mart rose 3.9 percent, or $1.91, to $51.28 on the New York Stock Exchange after hitting $52.15, its highest since March 2005. Other retailers' shares also rose, pushing the S&P retail index up 1.7 percent.

Caterpillar Inc. (CAT), another big influence on the Dow, rebounded 2.4 percent, or $1.42, to $60.42 after falling almost 15 percent on Friday.

Shares of International Business Machines Corp. (IBM),another Dow component and the world's largest technology services company, rose 1.2 percent, or $1.08, to $91.56. The company said it filed two patent infringement lawsuits against online retailer Amazon.com (AMZN). Amazon's shares gained 1 percent, or 31 cents, to $32.88 after falling initially following the news.

Google's stock gave the Nasdaq 100 its biggest list and also ranked among the major advancers in the S&P 500. Google's stock gained 4.6 percent, or $21.11, to close at $480.78 on the Nasdaq. Earlier, it climbed as high as $484.64, a lifetime peak, during the regular trading session.

December crude closed below $59 a barrel, moving nearer to the year's low of $56.55. On the New York Mercantile Exchange, the December crude contract fell 52 cents to settle at $58.81 a barrel.

Volume was fairly active on the NYSE, where about 1.55 billion shares changed hands, below last year's daily average of 1.61 billion. On the Nasdaq, about 1.88 billion shares were traded, above last year's daily average of 1.80 billion.

Decliners outnumbered advancers on the Big Board by about 7 to 5. On the Nasdaq, about 16 stocks rose for every 15 that fell.

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