NEW YORK (CNN/Money) -
The Dow closed above 10,000, a key psychological barrier, for the first time in more than 18 months Thursday as part of a broad market rally.
Unlike its two failed attempts Tuesday, ahead of the Federal Reserve's monetary policy announcement, this time the Dow Jones industrial average (up 86.30 to 10008.16, Charts) was able to cross the 10,000 threshold and stay there through the close. The last time the Dow closed above 10,000 was May 24, 2002, when it closed at 10,104.26.
The Standard & Poor's 500 (up 12.16 to 1071.21, Charts) also gained 1.1 percent, closing at a new 18-month high, its best since reaching 1,074.55 on May 28, 2002. The Nasdaq composite (up 37.67 to 1942.32, Charts) also rose 2 percent.
"We're really seeing almost a stealth rally today," said Michael Sheldon, chief market strategist at Spencer Clarke. "Some of the most beaten-down groups of the last few days -- like airlines and retailers -- are seeing gains. But it's not just them. Five out of 10 S&P 500 groups are up at least 1 percent."
The close above 10,000 could provide some follow through, Sheldon said, as it could bring in some of the money that's been on the sidelines lately between now and the end of the year.
After the close of trade Thursday, graphics chipmaker Adobe Systems (ADBE: up $1.70 to $39.78, Research, Estimates) reported a better-than-expected fourth-quarter profit of 34 cents that grew from a year earlier, and also raised its first-quarter earnings-per-share forecast. Shares rose 3 percent in after-hours trade.
Friday brings a few economic reports, including producer prices, the trade balance and the University of Michigan's first reading on consumer sentiment in December. The sentiment reading is the one of the three that tends to be the most market-moving. It is forecast to show a rise to 96.0 from 93.7 last month.
Thursday's market
Gains in a number of technology sectors, as well as a continued good performance among blue-chip issues, lifted the market. The morning's strong retail sales report and industry data showing a stronger-than-expected rise in PC demand next year added to the sentiment. Of the 30 stocks that comprise the Dow industrials, 26 traded higher.
"We had a brief correction for a few days with some early tax-selling and some portfolio managers wanting to take profits, but we're back on track today," said Robert Long, vice president of investments at Melhado Flynn & Associates.
Among the stocks moving, Dow component Home Depot (HD: up $1.45 to $34.53, Research, Estimates) added 4.4 percent, after the company said that it has completed its $1 billion share buyback program and that its board has approved an additional $1 billion for share repurchases. When corporations buy back their shares, it is often seen as a sign of corporate confidence, and can boost the stock.
Home Depot was also supported by the morning sales data, as were a number of retail stocks. Retail sales rose 0.9 percent in November, which was more than had been expected and up from the previous month, thanks to strong sales of autos, electronics and appliances. Excluding autos, retail sales rose 0.4 percent, also a bigger rise than expected and in line with the previous month's tally.
After a few sessions where investors rotated money out of certain technology stocks that have rallied this year and into less dynamic blue-chip alternatives, techs regained some favor Thursday.
Among the more bullish news: reports that Cisco Systems' (CSCO: up $0.15 to $23.93, Research, Estimates) chief executive said at the company's meeting with analysts Wednesday that corporate customers are raising their information technology spending budgets for 2004. The news did nothing for Cisco's stock, which is up 81 percent this year, as of Thursday's close, but did add to the overall optimism about tech spending.
IBM (IBM: up $0.67 to $92.40, Research, Estimates) added 67 cents after the company said it had signed an 8-year deal with French tire maker Michelin to manage its European and North American information technology operations. The deal is valued at  1 billion, or $1.21 billion dollars. IBM also benefited, along with some other PC-makers, from a report by market research group IDC, which said it now expects shipments of personal computers to increase 11.4 percent in 2004, up from its previous forecast for 10.2 percent growth.
Concord EFS (CE: Research, Estimates) gained 12 percent and was the NYSE's second most-active issue following a Wall Street Journal report that said that it could be getting more likely that rival First Data (FDC: up $0.85 to $39.06, Research, Estimates) will be able to close its $7 billion deal to buy Concord. The deal has been stalled amid antitrust concerns, but the paper says that there is an ongoing effort to resolve those issues.
Chipmakers TriQuint Semiconductor (TQNT: up $0.49 to $7.48, Research, Estimates) and Atmel (ATML: up $0.85 to $6.24, Research, Estimates) both rallied after increasing fourth-quarter earnings forecasts, due to stronger demand for their products. They were among many in the chip space pushing ahead. The Philadelphia Semiconductor (up 12.33 to 496.89, Charts) index, or the Soxx gained 2.5 percent. TriQuint gained 7 percent, while Atmel gained 15.8 percent.
Market breadth was positive, with more than three stocks rising for every one that fell on the New York Stock Exchange and almost three rising for every one that fell on the Nasdaq. Trading volume on the NYSE was 1.43 billion shares and on the Nasdaq was 1.78 billion shares.
Treasury prices rose. The 10-year note gained 23/32 of a point, its yield moving down to 4.22 percent.
The dollar edged up versus the euro and was little changed versus the yen. However, the greenback's broad struggle could prove a consistent problem for markets through the end of the year, analysts say.
The day's larger-than-expected rise in jobless claims provided a reminder that the labor market's considerable challenges remain.
NYMEX light sweet crude oil futures fell one penny to settle at $31.75 a barrel. COMEX gold fell $1.60 to settle at $405.40 an ounce.
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