The Dow Jones industrial average closed up 14.23 at 6,560.91, surpassing its previous closing high of 6,547.79 on Nov. 25.
The Dow opened higher with bonds, gave back half of its 22-point gains in late-morning profit-taking but recovered its footing in the afternoon.
Advancers led decliners by 7 to 4 on the New York Stock Exchange.
Broad-market indexes were narrowly mixed. The Nasdaq composite, under some pressure from profit-taking in computer stocks, fell 2.71 to 1,291.86. And the American Stock Exchange index was off 0.90 at 581.93. But the Standard & Poor's 500 list was up 0.48 at 756.30, and the NYSE composite index rose 0.97 to 756.79.
Bonds rose this morning, pushing blue chip stocks higher, after the Commerce Department said orders to U.S. factories for durable goods unexpectedly fell 1.6 percent in November, the first decline in three months, due largely to shrinking demand for electronic equipment.
The stock market is enjoying a year-end rally prompted by investors who want buy shares that have performed well this year. That explains the overperformance today of large-company stocks over smaller ones, said Jim Weiss, senior portfolio manager at State Street investments in Boston.
But volume was light, just over 250 million shares today on the Big Board.
With so many investors are absent following the Christmas holiday, the rise may have less conviction than market bulls would wish.
"It's just hard to draw any conclusions from this session," Weiss said.