NEW YORK – The Dow Jones Industrial average closed above 11,000 for the first time in 4 1/2 years as the market continued to rally on Monday.
The last time the Dow ended the trading day above 11,000 was June 7, 2001.
The Dow Jones industrial average ended up 52.59 points, or 0.48 percent, at 11,011.90. The Standard & Poor's 500 Index closed up 4.70 points, or 0.37 percent, at 1,290.15. The technology-laced Nasdaq Composite Index ended up 13.07 points, or 0.57 percent, at 2,318.69.
Crossing the 11,000 mark still puts the Dow about 6 percent below its all-time high of 11,750.28 set on January 14, 2000.
Many strategists say breaching the 11,000 mark does not signal a new trend for stocks. But they noted that because 11,000 signifies a psychological milestone, the Dow's climb above that point could boost sentiment.
"Whether it means we go higher, I don't know, but it certainly helps with average investor psychology," Hans Olsen, chief investment officer at Bingham Legg Advisers in Boston, said.
Stocks got off to a strong start for the new year last week, ending with the best gains in seven months amid optimism that the Federal Reserve may be nearing an end to interest-rate increases.
"The hope that everybody's pinning 2006 on is that these rate increases are coming to an end and therefore a significant headwind on higher stock prices is being lifted," Olsen said.
GM (GM) shares climbed 7.7 percent, or $1.61, to end at $22.41 on the NYSE after Goldman Sachs raised its rating on GM.
Prudential upgraded JPMorgan Chase (JPM), saying it expects "capital markets to perform better," while it raised Merrill Lynch to "overweight" from "neutral weight. JPMorgan shares rose 1.6 percent, or 65 cents, to end at $40.67 on the NYSE, while shares of Merrill gained 1.4 percent, or 98 cents, to end at $69.68 also on the NYSE.
Olsen said optimism about the fourth-quarter earnings reporting period, which kicks off this week, also is bolstering the market.
But after the market closed, shares of Dow component Alcoa Inc. (AA) dropped 1.9 percent in after-hours trading after the world's biggest aluminum producer posted a decline in quarterly profit. The stock fell to $30 in composite after-hours trading, down from a close of $30.57 on the New York Stock Exchange.
In the latest corporate deals, Texas Instruments Inc. (TXN) said it will sell its sensors and controls business to private equity firm Bain Capital LLC for $3 billion in cash. Texas Instruments' shares slipped 0.8 percent, or 27 cents, to end at $34.18 on the NYSE..
On the Nasdaq, shares of Urban Outfitters Inc. rose 14.7 percent, or $3.72, to end at $29.07 after Prudential Equity Group initiated coverage of the retailer with an "overweight" rating.
Volume was heavy on the NYSE with 1.67 billion shares trading hands, above last year's daily average of 1.61 billion. On Nasdaq, about 2 billion shares were traded.
Advancers beat decliners on the NYSE by about 2 to 1 while gainers outnumbered decliners by a ratio of 3 to 2 on the Nasdaq.
The biggest negative influence on the Dow was International Business Machines Corp. (IBM), whose shares fell 1.4 percent to end at $83.73. J.P. Morgan cut its rating on IBM to "neutral" from "overweight," according to a report by MarketWatch.
Information from Reuters contributed to this report.
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