Bulls frolic to start the year

NEW YORK (CNNMoney.com) -- Stocks rallied Wednesday, with the Dow Jones industrial average hitting a fresh record trading high on the first trading day of 2007.

Lower oil prices, upbeat economic news and strength in retailers such as Home Depot and Wal-Mart Stores all fed the early momentum.

The Dow Jones industrial average (up 112.23 to 12,575.38, Charts) added more than 100 points, or 0.8 percent nearly 90 minutes into the session, hitting a fresh record trading high.

The broader S&P 500 (up 10.42 to 1,428.72, Charts) index added nearly 0.7 percent and the Nasdaq (up 34.53 to 2,449.82, Charts) composite gained 1.4 percent.

Stocks slipped Friday at the end of a strong year on Wall Street. All financial markets were closed Monday for New Year's Day and Tuesday for the national day of mourning for President Ford.

After the unusual four-day market closing, investors came back in droves Wednesday.

Factors influencing trade included a drop in oil prices, upbeat corporate news and a pair of encouraging economic reports.

U.S. light crude oil for February delivery slumped $2.15 to $58.90 a barrel on the New York Mercantile Exchange.

In corporate news, Home Depot (up $1.63 to $41.79, Charts) CEO Robert Nardelli is leaving the company. Nardelli, who was criticized for the size of his pay package and for his management style, will leave with a $210 million severance package. (Full story).

Home Depot shares jumped 3 percent, while rival Lowe's (up $0.92 to $32.07, Charts) gained 2 percent.

In addition to Home Depot, fellow Dow retailer Wal-Mart Stores (up $1.72 to $47.90, Charts) jumped after saying that December sales at stores open a year or more rose more than expected.

Market breadth was positive. On the New York Stock Exchange, winners trounced losers five to two on volume of 590 million shares. On the Nasdaq, advancers topped decliners two to one as 670 million shares changed hands.

Treasury prices were barely higher, giving back bigger morning gains. The yield on the benchmark 10-year note stood at 4.67 percent. Bond prices and yields move in opposite directions.

In global trade, major Asian markets ended higher and European markets rose in late trade.

On the economic front, the Institute for Supply Management's manufacturing index rose to 51.4 in December, topping forecasts for a rise to 50. The index stood at 49.5 in November - a reading below 50 indicates contraction.

November construction spending fell 0.2 percent, versus forecasts for a drop of 0.6 percent.

Minutes from the December Federal Reserve policy meeting were due later Wednesday.

Investors were still riding high on the momentum of 2006, the fourth up year in a row for the S&P 500 and Nasdaq composite. It was the third of four upbeat years for the Dow, after the blue-chip average fell slightly last year.

The S&P gained 13.5 percent last year and the Nasdaq gained 9.6 percent. The Dow industrials gained 16.4 percent.

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