Stocks extend '06 rally
Major gauges rise for 5th straight session; Dow breaks 11,000 for first time in 4-1/2 years.

NEW YORK ( - Stocks rallied for a fifth straight session Monday, as the Dow industrials crossed the 11,000 mark for the first time since 2001.

The Dow (up 52.59 to 11,011.90, Charts) hit the 11,000 mark for the first time since June 13, 2001, reaching as high as 11,012.40 before retreating slightly to close up 0.5 percent. The last time the Dow ended above 11,000 was June 7, 2001; the all-time closing high, which was reached on Jan. 14, 2000, stands at 11,722.98.


The broader S&P 500 index (up 4.70 to 1,290.15, Charts) added 0.4 percent, while the tech-heavy Nasdaq composite (up 13.07 to 2,318.69, Charts) was up 0.6 percent.

Stocks got 2006 off to a strong start last week, boosted by optimism that the Federal Reserve may be nearing an end to interest-rate increases.

"Investors are awaiting earnings and economic data later in the week" to help them decide whether to extend the market's 2006 rally, said Peter Cardillo, chief market analyst at S.W. Bach & Co.

What moved?

Alcoa (up $0.36 to $30.57, Research), one of the 30 components in the Dow average, kicked off the financial reporting period on a disappointing note after reporting fourth-quarter net income fell below expectations. Shares of the aluminum producer fell more than 3 percent in extended trade on the Inet electronic brokerage network.

Results from Genentech (up $1.33 to $92.66, Research) and Supervalu (down $0.07 to $32.82, Research) are slated for Tuesday.

Also after the closing bell, Wyeth (down $0.24 to $47.52, Research) and Endo Pharmaceuticals (Research) forecast 2006 earnings below Wall Street estimates, sending shares of both companies down in after-hours trade.

But Planar Systems (Research) raised its first-quarter earnings estimates and shares jumped 26 percent on Inet.

GM (up $1.61 to $22.41, Research) was by far the Dow's biggest gainer, up over 7 percent in regular trade before retreating slightly after hours, after Goldman Sachs raised its rating on the automaker to "in-line" from "underperform."

Shares of Ford (up $0.10 to $8.62, Research) and Daimlerchrysler (up $0.75 to $54.55, Research) were also higher as news rolled in from the North American International Auto Show in Detroit.

Meanwhile, IBM (down $1.22 to $83.73, Research) was the Dow's biggest loser as shares slumped nearly 1.5 percent after the company was downgraded to "neutral" from "overweight" at J.P. Morgan, citing risks in services and hardware.

J.P. Morgan also downgraded (down $0.79 to $47.08, Research) to "underweight" from "neutral," citing concerns that U.S. growth will continue to be below that of the broader electronic commerce market. Shares fell almost 2 percent on the Nasdaq.

But shares of XM Satellite Radio (up $1.99 to $29.94, Research) rose over 7 percent, giving the Nasdaq a boost, after Deutsche Bank raised the satellite radio provider to "buy" from "hold" and boosted its price target to $33 from $30.

Rival Sirius Satellite Radio (up $0.03 to $6.57, Research) also rose as the Howard Stern show debuted on the service.

On the M&A front, Boston Scientific (down $0.36 to $25.88, Research) made a formal offer to buy Guidant (up $1.65 to $69.00, Research) in a deal worth $25 billion in cash and stock. The company added that it will sell a number of Guidant units to Abbott Laboratories (up $1.52 to $42.41, Research) -- a move it anticipates will allow for quicker antitrust clearance if its offer is accepted.

Guidant shares rose 2.5 percent and Abbott stock was up over 3.5 percent.

Shares of Texas Instruments (down $0.27 to $34.18, Research) fell close to 1 percent after the chipmaker said it will sell its sensors and controls business to Bain Capital for $3 billion in cash.

And Duke Energy (up $0.06 to $27.85, Research) stock edged higher after the company said it would sell Duke Energy North America's power-generation assets outside the Midwest for about $1.5 billion to LS Power Equity Partners.

Meanwhile, Tyco (up $1.06 to $31.04, Research) is considering a breakup of the $60 billion conglomerate pieced together by former CEO Dennis Kozlowski, the Wall Street Journal reported, citing people familiar with the matter. Shares rose 3.5 percent on the news.

In other news, shares of Urban Outfitters (up $3.72 to $29.07, Research) jumped 15 percent after a bullish note from Lehman Brothers forecasted a strong spring season for the clothing retailer's Anthropologie chain.

Treasury prices slipped with little economic news during the session, raising the yield on the 10-year note to 4.37 percent. The dollar gained against the euro but dipped against the yen.

The wholesale inventories report is due out on Tuesday and crude inventories is on tap the next day.

Oil prices turned lower, aided by mild weather in the Northeast. Light, sweet crude for February delivery fell 71 cents to $63.50 a barrel on the New York Mercantile Exchange.

COMEX gold for February delivery surpassed a 25-year peak, jumping $9.30 to $550.50.

Market breadth was positive. On the New York Stock Exchange, winners beat losers by two to one on volume of roughly 1.7 billion shares. On the Nasdaq, advancers topped decliners by three to two on volume of 2 billion shares. Top of page

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