DOW CLOSES UP 115 AT NEW HIGH, NASDAQ UP 8

NEW YORK (AP) — Wall Street extended its October rally Monday as investors grew more confident about upcoming earnings reports and as a decline in oil bolstered hopes for higher consumer spending. The Dow Jones industrials crossed 12,100 for the first time and reached a new record high close.

Dow component Wal-Mart Stores Inc., which pleased investors by announcing plans to cut capital spending to improve profits, helped the blue chips to their new high.

Strength from International Business Machines Corp., Hasbro Inc., and Xerox Corp. also fed the advance. Just halfway through the third-quarter earnings season, companies’ generally upbeat reports have given investors a renewed sense of seucrity about the future.

“The blue chips have absolutely outperformed most markets, and this was an extension of that trend,” said Steven Goldman, chief market strategist at Weeden & Co. “I don’t think things are overdone. Investors are looking ahead thinking an economic slowdown is forthcoming, and its safer to get into household names and not new companies.”

AP_Tacoda_AMS_DDC_addPair(“SECTION”, “STOCKS”) AP_Tacoda_AMS_DDC(“http://te.ap.org/tte/blank.gif”, “1.0”)

Blue chips resumed a three-month rally Monday after stalling Friday; the Dow had already risen 233 points in October before Monday’s trading. The average, which crossed 12,000 just last week, also reached a new trading high Monday of 12,125.16.

In preliminary calculations, the Dow Jones industrial average rose 114.54, or 0.95 percent, to 12,116.91.

The Standard & Poor’s 500 index rose 8.42, or 0.62 percent, to 1,377.02, and the Nasdaq composite index rose 13.26, or 0.57 percent, to 2,355.56.

The advance came despite some concerns about the Federal Reserve’s two-day meeting on interest rates, which starts Tuesday. 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.

Treasury bonds fell on speculation the Fed will keep its benchmark rate at 5.25 percent, which is still at its highest level in more than five years. Bonds fell, with the yield on the benchmark 10-year Treasury note rising to 4.83 percent form 4.79 percent on Friday.

The dollar was mixed against other major currencies, while gold prices fell.

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. Doubts that OPEC members would follow Saudi Arabia’s lead to curb output pushed a barrel of light sweet crude lower by 52 cents to $58.81 on the New York Mercantile Exchange.

“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.

Wal-Mart, the world’s largest retailer, said it will be more selective about where it will open stores, though it still plans 600 new locations next year. The retailer, which has been pushed by Wall Street to be more prudent in its expansion, was the Dow’s biggest advancing stock.

The retailer said in a meeting with investors that it plans to bring costs in line with a slowdown in its sales and earnings growth. The move is expected to boost return on investment, and sent shares up $1.91, or 3.9 percent, to $51.28.

IBM was the Dow’s second-biggest advancer. The technology company filed two patent infringement lawsuits against online retailer Amazon.com Inc. over technologies used to run Internet services.

Big Blue rose $1.08 to $91.56, while Amazon added 31 cents to $32.88.

AT&T Inc. rose 27 cents to $34.71 after reporting third-quarter profit rose 74 percent to exceed Wall Street projections. The telecommunications company said its quarter was boosted by strong growth at its Cingular Wireless unit.

Ford Motor Co. fell 11 cents to $7.90 after posting its largest quarterly loss in more than a decade. The troubled automaker’s took a massive charge during the period to cover a restructuring plan that will shutter 16 plants and cut as many as 45,000 jobs.

Hasbro Inc. rose $2.03, or 8.7 percent, to $25.33 after the toymaker reported an 8.2 percent increase in its third-quarter profit amid strong sales of brands such as Playskool. Meanwhile, Xerox Corp. rose 47 cents, or 3 percent, to $16.47 after its third-quarter profit beat analysts’ expectations.

Advancing issues outnumbered decliners by about 3 to 2 on the New York Stock Exchange, where volume came to 1.54 billion shares.

The Russell 2000 index of smaller companies fell 1.39, or 0.18 percent, to 763.52.

Overseas, Japan’s Nikkei stock average closed up 0.82 percent. Britain’s FTSE 100 closed up 0.18 percent, Germany’s DAX index rose 0.65 percent, and France’s CAC-40 advanced 0.68 percent.