Dow touches 11,000

[notiCIas]

Dow touches 11,000

GM upgrade propels blue-chip indicator to highest level since 2001; broader market inches upward.

January 9, 2006: 1:20 PM EST


NEW YORK (CNNMoney.com) - The Dow industrials touched the 11,000 mark for the first time in more than 4-1/2 years Monday, aided by an upgrade of blue-chip General Motors.

The Dow (up 37.70 to 10,997.01, Charts) rose 0.3 percent, hitting the 11,000 mark for the first time since June 13, 2001, reaching as high as 11,003.50 before retreating slightly.

The broader S&P 500 index (up 2.97 to 1,288.42, Charts) added over 0.2 percent, while the tech-heavy Nasdaq composite (up 11.84 to 2,317.46, Charts) was up over 0.5 percent midway through the session.

"The markets are higher across the board, oil prices are a bit lower and the dollar is strengthening," said Peter Cardillo, chief market analyst at S.W. Bach & Co. "I think what we are seeing is tech continuing to lead the way, and GM helping out the Dow."

GM (up $1.04 to $21.84, Research) was by far the Dow's biggest gainer, up 5 percent, after Goldman Sachs raised its rating on the automaker to "in-line" from "underperform."

Shares of Ford (up $0.18 to $8.70, Research) and Daimlerchrysler (up $0.55 to $54.35, Research) were also higher as news rolled in from the North American International Auto Show in Detroit.

Meanwhile, IBM (down $1.19 to $83.76, Research) was the Dow's biggest loser as shares slumped almost 2 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 Amazon.com (down $1.12 to $46.75, 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 more than 2 percent on the Nasdaq.

But shares of XM Satellite Radio (up $1.82 to $29.77, Research) rose over 6 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 $0.12 to $6.66, Research) also added over 2 percent as the Howard Stern show debuted on the service.

On the M&A front, Boston Scientific (down $0.48 to $25.76, Research) made a formal offer to buy Guidant (up $1.64 to $68.99, 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 $1.02 to $41.91, Research) -- a move it anticipates will allow for quicker antitrust clearance if its offer is accepted.

Guidant shares and Abbott stock both rose over 2 percent.

Shares of Texas Instruments (down $0.36 to $34.09, Research) fell over 1 percent after the chipmaker said it will sell its sensors and controls business to Bain Capital for $3 billion in cash.

In other news, shares of Urban Outfitters (up $2.85 to $28.20, Research) jumped 11 percent after a bullish note from Lehman Brothers forecasted a strong spring season for the clothing retailer's Anthropologie chain.

Tyco (up $1.08 to $31.06, 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 nearly 4 percent.

Bank of America (up $0.07 to $46.64, Research) and PNC Financial (up $0.11 to $64.62, Research) received approval from regulators to develop and own large hotel and office properties, potentially opening the door wider to business -- such as commercial real estate -- beyond the banks' traditional role as lenders, the Wall Street Journal reported.

Oil prices turned lower, aided by mild weather in the Northeast. Light, sweet crude for February delivery fell $1.16 to $63.05 a barrel on the New York Mercantile Exchange.

Treasury prices dipped with little ecenomic data on tap, raising the yield on the 10-year note to 4.38 percent. The dollar gained against the euro but was flat against the yen.

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

Asian markets ended mostly higher, while European markets closed at a 4-1/2-year high; Tokyo was closed for a national holiday.

Market breadth was positive. On the New York Stock Exchange, winners beat losers by nearly two to one on volume of roughly 900 million shares. On the Nasdaq, advancers topped decliners by four to three on volume of 1.2 billion shares.