NEW YORK (CNNfn) - Wall Street pushed further into record territory at midday Wednesday, driven by a boost in corporate merger activity and the usual investor lust for stocks at the start of a new year.
Shortly before 11:30 a.m. ET the Dow Jones industrial average was 119.21 points, or 1.3 percent, higher at 9,430.40, trading well above its last record close of 9,374.27, set Nov. 23.
On the New York Stock Exchange advances trounced declines 1,779 to 1,003 as 354 million shares traded.
The Nasdaq Composite surged 44.87, or 2 percent, to 2,296.14 and the S&P 500 index gained 15.59, or 1.3 percent, to 1,260.37, both trading in record territory. (Click here for a look at today's CNNfn market movers)
The bond market traded lower, still weighed by weakness in the dollar and the stock market's strong advance. The benchmark 30-year Treasury bond traded 3/32 lower in price, for a yield of 5.21 percent.
The dollar regained some small ground against the Japanese yen, but market watchers predicted more pain ahead for the U.S. currency. The greenback also traded barely higher against the euro.
Mergers and high hopes
In stocks, a simmering merger frenzy and hopes that the first month of the year will bring investors the traditional high returns helped push all major market indexes sharply higher.
Technology, Internet, financial and transportation issues led the way.
Shares of wireless giant AirTouch Communications (ATI) gained 2-1/2 to 80 after British firm Vodafone (VOD) made a $55 billion offer to acquire the company, well above the $45 billion Bell Atlantic (BEL) offered to pay. Vodafone's American depositary receipts rose 3/4 to 179-7/8 and Bell Atlantic's shares gained 2-5/16 to 56-7/8.
Merger speculation also brewed in the auto sector, where DaimlerChrysler (DCX) is in talks to acquire Nissan Motor (NSANY) and Ford (F) is widely rumored to be eyeing BMW and Honda Motor (HMC). DaimlerChrysler was up 2-1/16 to 108-3/16 and Ford moved 2-1/2 higher to 62.
Elsewhere in the market, investors' appetite for technology and Internet issues also kept going strong. Among the blue-chip techs, Dow component IBM (IBM) rose 1-11/16 to 191-5/16, Microsoft (MSFT) advanced 2-5/16 to 148-13/16, Dell Computer (DELL) gained 2-7/16 to 77-11/16, and Intel (INTC) was up 2-3/4 to 126.
On the Internet front, shares of Amazon.com (AMZN) climbed 11-1/4 to 135-3/4 and Yahoo! (YHOO) surged 16-1/8 to 274.
Airline shares extended Tuesday's strong gains, driving the Dow transports index 83.56, or 2.6 percent, higher to 3,275.94. Shares of AMR (AMR), the parent of American Airlines, rose 2-11/16 to 66-3/4, Delta Air Lines (DAL) was up 2-11/16 to 57-3/16, and UAL (UAL), the parent of United Airlines, advanced 1-7/16 to 65-1/16.
Among the day's few losers, aerospace and defense giant NorthropGrumman (NOC) tumbled 5-3/8 to 67-7/8 after the company revealed that its 1998 pretax income will be cut by $1.18 a share due to charges stemming mostly from reduced deliveries to Boeing.
Shares of Aspect Telecommunications (ASPT) tumbled 4-11/16, or more than 27 percent, to 12-3/8 after the company said it would earn 12 to 14 cents a share in the fourth quarter, well below market expectations for 21 cents a share.
Finally, Tenneco (TEN) suffered a similar fate, losing 5/16 to 35-5/8 after warning that fourth-quarter earnings per share would come in 12 to 14 cents below year-earlier results and also sharply below Wall Street expectations. 
-- by staff writer Malina Poshtova Zang
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