Stocks finished modestly higher Monday, as the Dow pulled within 20 points of the 12,000 level en route to new intraday and closing highs. Investors were turning their attention toward earnings season ahead of key inflation data due Tuesday and Wednesday.
On Monday, the Dow Jones industrial average rose 20.09 points, or 0.17%, to 11,980.6, a new all-time closing high, after briefly touching a fresh intraday record of 11,997.09. The broader Standard & Poor's 500 index added 3.44 points, or 0.25%, to 1,369.06. The tech-heavy Nasdaq composite gained 6.55 points, or 0.28%, to 2,363.84.
NYSE breadth was decidedly positive, with 23 issues advancing for every 10 declining. Nasdaq breadth was 19-11 positive.
A push above 12,000 could prove self-perpetuating, like the Dow's recent march to new all-time highs, some analysts say. "It's a ringing of the bell that, hey, maybe if you haven't been in the market for a while, it's time to pay attention," says Art Hogan, chief market analyst at Jefferies. "The better it does, the more people notice, and the more people notice, the better it does."
Nevertheless, some analysts continue to suggest a defensive posture. "We're apt to believe that this surge in equities represents the final blowoff move of this four-year bull market advance from the 2002 lows," says Morgan Stanley technical analyst Mark Newton.
Others say the advance could still have legs. The Dow's climb to a new all-time high "was one piece of evidence the May-June decline was simply a correction in a continuing bull market," say Lowry's Reports analysts Paul Desmond and Richard Dickson. "Now, investors are closely watching the S&P 500 index, which is less than 12% below its all-time high."
A report on wholesale inflation highlights Tuesday's economic calendar, followed by the consumer price index Wednesday. Also on tap Tuesday are earnings reports from Dow components Intel (INTC) and IBM (IBM), along with data on September industrial production.
Among stocks in focus Monday, UnitedHealth Group (UNH) was lower on news Chairman and CEO William McGuire stepped down after an independent probe found the health insurance company had backdated stock options over the past 12 years.
Meanwhile, chipmaker Altera (ALTR) said an expected restatement of financial results to correct stock-options accounting issues will cause the company to take a $35.2 million charge.
In earnings news, Wachovia (WB) was lower after the bank reported a 13% rise in third-quarter profit, in line with analyst estimates, on unexpectedly soft revenue.
Toymaker Mattel (MAT) was higher as the company posted a 6% increase in earnings for the quarter, topping Wall Street expectations.
Investors were also assessing some M&A activity. Vehicle maker Oshkosh Truck (OSK) said it is buying JLG Industries (JLG), which makes aerial work platforms and booms, for about $3 billion in cash.
Home-improvement retailer Home Depot (HD) was lower after Goldman Sachs cut its recommendation on the stcok from buy to neutral. Goldman also boosted rival (Lowe's) (LOW) from neutral to buy.
Shares of General Electric (GE) dipped as Merrill Lynch reportedly downgraded the stock to neutral, while Citigroup cut its earnings estimates for the industrial and media conglomerate.
On the economic front, the Empire State index of regional manufacturing activity climbed to 22.92 in October after rising to 13.84 in September. Federal Reserve Chairman Bernanke gave a speech but stayed away from economic or policy references. St. Louis Fed President William Pool and San Francisco Fed President Janet Yellen each sounded a mildly hawkish note on the inflation outlook.
In the energy markets, November West Texas Intermediate crude futures rose $1.37 to $59.94 a barrel amid reports OPEC will meet Thursday to cut output to bolster sagging prices.
European markets finished modestly higher on M&A news and strength in metals stocks. In London, the FTSE-100 index rose 15.1 points, or 0.25%, to 6,172.4. Germany's DAX index added 12.86 points, or 0.21%, to 6,186.54. In Paris, the CAC 40 index was up 8.74 points, or 0.16%, to 5,361.97.
Asian markets ended higher as strong reports on U.S. consumer confidence and spending soothed demand worries. In Japan, the Nikkei 225 index gained 156.22 points, or 0.94%, to 16,692.76. In Hong Kong, the Hang Seng index advanced 21.34 points, or 0.12%, to 18,010.2. Korea's Kospi index climbed 8.12 points, or 0.6%, to 1,356.72.
Treasury yields ticked lower ahead of key inflation reports due Tuesday and Wednesday. The 10-year note edged up in price to 100-22/32 for a yield of 4.79%, while the 30-year bond rose to 93-17/32 for a yield of 4.92%.