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Record day on Wall Street

Dow and S&P 500 end at new all-time highs, Nasdaq at new 6-year high; investors focus on positive aspects of Fed minutes, shake off worries about China market and weak private payroll number.

By Alexandra Twin, CNNMoney.com senior writer

NEW YORK (CNNMoney.com) -- Stocks rallied Wednesday, with the Dow industrials and the S&P 500 closing at new all-time highs, as investors found momentum at the end of a tumultuous session on Wall Street.

The Dow Jones industrial average (up 105.48 to 13,626.82, Charts) gained 0.8 percent and closed at a record high, according to initial tallies, at 13,633.08; the blue-chip average also hit a new intraday record of 13,636.09 shortly before the close.

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The broader S&P 500 index (up 11.13 to 1,529.24, Charts) added 0.8 percent and closed at an all-time high, at 1,530.23 according to preliminary figures, taking out its previous closing high of 1,527.46 from March 24, 2000. That level would prove to be the top of the bull market sparked by the late 1990s tech rally.

The Nasdaq composite (up 18.05 to 2,590.11, Charts) gained 0.8 percent and closed at a fresh 6-year high.

Stocks fell in the morning on worries about a selloff in global markets. But stocks recovered and turned higher by the close, as investors focused on the positive aspects of the minutes from the last Fed policy meeting, including the bankers' observation that risks to the economy are waning.

Treasury prices rose, lowering the corresponding yields. Oil prices rose and the price of gold fell.

Here's a look at what was moving near the close.

The major gauges had been on both sides of unchanged throughout a choppy session. Stocks fell in the morning on worries that the slump in the Chinese stock market could mean U.S. shares were due for a pullback. But by midday, investors looked beyond such worries and sent stocks higher.

Investors took a similarly knee-jerk reaction to the minutes from the last Fed meeting, initially sending stocks lower, before reassessing the minutes and sending stocks higher near the close.

Considering all the day's events, the market advance was a bit surprising, said John Davidson, president and CEO at PartnerRe Asset Management.

"We've had a great run up fueled by the mergers and acquisitions activity and today is partly still fueled by that, but I am a bit perplexed," he said, noting that the reaction to the developments in China was surprisingly short-lived, considering the potential implications.

In addition, the Fed minutes didn't really offer anything new, he said. Yet, stocks rallied shortly after the release.

In the minutes from the last Fed meeting in May, the central bankers again said that economic growth was slow, but that it would pick up in the quarters ahead, thanks in part to an improved business spending environment.

The housing market will likely continue to struggle for longer than initially anticipated, the minutes said. Additionally, the bankers again said that the possibility of inflation remaining stubbornly high was their predominant concern going forward.

If anything, Wednesday's market seems to attest to the face that Wall Street is "back to interpreting both good news and bad news as good news," Davidson said.

Bad news is seen as evidence that the Fed might ease later this year, good news is seen as showing that the economy is holding up, he added.

U.S. stocks slumped in the morning as investors considered the implications of a 6.5 percent slide in China's benchmark stock index, which initially revived worries of a global equity market slowdown.

Chinese stocks slumped after the government tripled the tax on share trades in a bid to slow the surging stock market, which had risen 62 percent as of Tuesday's close. European stocks tumbled Wednesday in response, and U.S. shares sank throughout the morning.

However, the morning declines were minimal, particularly in comparison to the drubbing Wall Street took in late February. On Feb. 27, a more than 9 percent fall in Shanghai stocks sent the Dow tumbling 416 points, its biggest one-day point loss in 5-1/2 years. That led to further declines over the next week.

But on Wednesday, the U.S. stock market had erased the losses by the afternoon, as investors considered that the Chinese market doesn't have a sizeable share of the global market and is not a big influence on U.S. stocks. Also, ex-Fed chief Alan Greenspan and others have been sounding the alarm on a Chinese market correction for the last few weeks, preparing investors for a decline.

Additionally, "it wasn't like the economy collapsed, they just boosted the tax on share trades," said Ron Kiddoo, chief investment officer at Cozad Asset Management.

Kiddoo said that a bigger catalyst would be needed to really spook global markets, such as the economy and currency concerns that sparked the big February selloff.

Since that February decline, stocks have bounced back, with investors using the pullback as an opportunity to get back in at lower levels.

The Dow hit new closing and intraday highs last week and is up 8.5 percent this year, as of Tuesday's close. The S&P 500 ended just 2 points short of its all-time closing high of 1,527.46 from March 2000 last week and has gained 6 percent this year. The Nasdaq composite hit a 6-year high last week and is up 6.5 percent in 2007.

Also influencing Wednesday trading was a new round of deal-making.

CDW Corp. agreed to be bought out for $7.3 billion by private equity investor Madison Dearborn Partners LLC, confirming reports that first surfaced Tuesday. Shares of CDW Corp. (up $1.97 to $85.08, Charts, Fortune 500), a computer retailer, gained nearly 3 percent after adding more than 9 percent Tuesday.

Biogen Idec (up $2.96 to $52.17, Charts) shares jumped 5 percent after the company said its board had approved a $3 billion stock buyback plan.

Among other movers, Coldwater Creek (up $3.41 to $24.31, Charts) surged 16 percent after the women's clothing retailer said late Tuesday that sales and earnings grew from a year ago and topped expectations.

Shares of biotech Novacea (up $6.91 to $14.97, Charts) nearly doubled after the company said it signed a licensing deal with Schering-Plough (up $0.02 to $32.73, Charts, Fortune 500) to develop and market its treatment for prostrate cancer.

Merck (down $0.68 to $52.72, Charts, Fortune 500) slumped 1.5 percent as investors took profits after the drug maker hit a multi-year high last week.

Merck was the Dow's biggest decliner. Dow gainers were led by Caterpillar (up $2.66 to $78.42, Charts, Fortune 500) and Boeing (up $2.03 to $100.53, Charts, Fortune 500).

Intel (down $0.21 to $22.09, Charts, Fortune 500), Applied Materials (down $0.29 to $18.92, Charts, Fortune 500) and Qualcomm (down $1.31 to $42.83, Charts, Fortune 500) were among the big-cap losers on the Nasdaq.

A number of oil services stocks rose, bouncing back after the previous session's drubbing. Gainers included Valero Energy (up $1.72 to $75.34, Charts, Fortune 500), El Paso (up $0.92 to $17.03, Charts, Fortune 500) and Sunoco (up $1.77 to $79.47, Charts, Fortune 500).

Market breadth was positive. On the New York Stock Exchange, winners beat losers almost 2 to 1 on volume of 1.2 billion shares. On the Nasdaq, advancers narrowly bested decliners on volume of 1.65 billion shares.

Investors also eyed the May ADP employment survey, a measure of job growth in the private sector. The report showed weaker-than-expected payroll growth, perhaps signaling weakness in Friday's broader government job report for May.

U.S. light crude oil for July delivery rose 34 cents to $63.49 a barrel on the New York Mercantile Exchange.

COMEX gold fell $4.10 to $659.30 an ounce.

Treasury prices rose, lowering the yield on the 10-year note to 4.87 percent from 4.88 percent late Tuesday. Bond prices and yields move in opposite directions.

In currency trading, the dollar gained versus the euro and was little changed versus the yen. Top of page