By JOE BEL BRUNO AP Business Writer
NEW YORK Oct 23, 2006 (AP)— Wall Street extended its October rally Monday as investors grew more optimistic about upcoming earnings reports, and a decline in oil bolstered hope for higher consumer spending.
The Dow Jones industrials crossed 12,100 for the first time. Dow component Wal-Mart Stores Inc., which said it will cut capital spending to improve its profits, helped the blue chips to their new trading high.
Strength from International Business Machines Corp., Hasbro Inc., and Xerox Corp. also fed the advance. Just halfway through third-quarter earnings season, generally upbeat reports have instilled new confidence about the future in investors.
"The picture being painted is pretty easy to suggest that the pressure on the economy from higher oil prices is easing," said Richard E. Cripps, chief market strategist at Stifel Nicolaus. The price of oil, which fell to lows for the year Friday from its mid-July highs, is making investors more bullish on sectors like retail, which will benefit if consumers have more spending money.
Blue chips resumed a three-month rally after stalling Friday; the Dow, which had already risen 233 points in October before Monday's trading, surpassed 12,100 and reached a new trading high of 12,125.16, eclipsing the old mark of 12,049.51 set last week. Broader market indexes also gained as investors shrugged off concerns about the Federal Reserve's decision on interest rates later this week.
In late afternoon trading, the Dow Jones industrial average rose 109.34, or 0.91 percent, to 12,111.71. Blue chips passed 12,000 for the first time last week.
The Standard & Poor's 500 index rose 7.23, or 0.53 percent, to 1,375.83, and the Nasdaq composite index rose 12.72, or 0.54 percent, to 2,355.02.
The advance came despite some concerns about the Fed's meeting on Wednesday. Policymakers are expected to leave interest rates unchanged, though they could sound a hawkish tone in their accompanying economic assessment because of recent signs of rising inflation.