Dow climbs above 13,700

NEW YORK (CNNMoney.com) -- The Dow Jones industrial average surged into record trading territory Thursday, topping the 13,700 for the first time ever, helped by takeover news and some strong retail monthly sales numbers.

The Dow (up 125.43 to 13,703.30, Charts) jumped more than 130 points or 0.8 percent in early trading to a record trading high of 13,719.23, breaking the previous record of 13,692 set June 4.

The Dow was also trading above its record closing high of 13,676.32 which was reached on June 1.

The broader S&P 500 (up 13.07 to 1,531.83, Charts) climbed nearly 0.9 percent, while the tech-laden Nasdaq (up 19.05 to 2,670.84, Charts) its highest jumped over 0.7 percent.

U.S. markets managed a modest rally Wednesday, rebounding from concerns earlier in the week about subprime mortgages.

Stocks however, got a lift from merger activity Thursday as mining giant Rio Tinto (down $8.86 to $315.56, Charts) announced it agreed to buy Alcan in a deal valued at $38.1 billion. The deal would create the world's largest aluminum producer and thwart Alcoa's (up $2.92 to $45.35, Charts, Fortune 500) hostile bid for the Canadian company.

Alcan (up $9.41 to $99.01, Charts) shares surged over 9 percent in early trade on the New York Stock Exchange.

In other takeover news, Apollo Management's Hexion Specialty Chemicals said it agreed to buy chemical maker Huntsman (down $1.15 to $26.42, Charts, Fortune 500) in an all-cash deal worth $6.5 billion.

Major U.S. retailers delivered mixed monthly sales numbers Thursday, despite June being a heavy discount month.

Wal-Mart (up $1.14 to $48.82, Charts, Fortune 500) however, delivered some impressive results, reporting that same-store sales rose 2.4 percent, almost three times higher than forecasts.

In corporate news, Motorola (down $0.08 to $17.87, Charts, Fortune 500) forecast a second-quarter loss late Wednesday and said it no longer expects its cell phone business to be profitable for 2007, blaming weak sales in Asia and Europe.

GE (up $0.08 to $38.28, Charts, Fortune 500) and Abbott (down $0.11 to $53.10, Charts, Fortune 500) said after the market close Wednesday they had terminated a proposed $8 billion deal for GE to buy two Abbott businesses because they couldn't agree on final terms.

On the economic front, the trade gap widened in May, meeting economists expectations, with much of the rising gap due to oil prices.

Weekly jobless claims fell more than expected to 308,000 last week, the Labor Department reported.

Overseas, European stocks were higher Thursday, and most Asian markets finished the session higher.

Treasury prices eased, taking the yield on the 10-year note to 5.10 percent from the 5.09 percent level reached late Wednesday. The dollar continued to slide against the euro and the yen in early trading.

Oil prices rose above the $73 a barrel mark in early trading, as U.S. light crude gained 89 cents to $73.45 a barrel in electronic trading.