How long will Dow stay above 11,000?

NEW YORK » Wall Street may have kicked off the new year by catapulting stocks to multiyear highs, but savvy investors are already wondering when this party will be over.

For the first time since before the Sept. 11, 2001, terrorist attacks, the Dow Jones industrial average topped 11,000 yesterday following a five-day rally that has sent stocks soaring so far in 2006.

When the Dow last finished above that milestone -- on June 7, 2001, at 11,090.74 -- it was off its record highs and the high-tech boom was on the wane, but many investors still hoped for a return to the unprecedented growth of the 1990s. These days, traders are much more cautious about the barrage of hurdles standing in their way: energy prices, inflation, interest rates, consumer spending and corporate earnings. And so it's taken more than 4 1/2 years for the Dow to reclaim 11,000.

At the close of trading yesterday, the average of 30 blue-chip stocks ended the session up 52.59, or 0.48 percent, at 11,011.90.

What propelled the Dow higher this time wasn't speculation like the kind that fed the tech bubble. It was simply a hope that money will be easier to borrow -- yesterday's advance followed a 241-point surge last week as investors grew increasingly optimistic that the Federal Reserve will soon end its string of interest rate hikes.

Investment firms' upgrades of Dow components General Motors Corp. and JPMorgan Chase & Co. helped carry the index past 11,000 yesterday.

"It sends a signal that the U.S. economy has weathered some pretty harsh storms over the past few years and in recent months," Art Hogan, chief investment strategist at Jefferies & Co., said of the Dow's achievement.

Hogan said heightened clarity about the Fed's rate tightening, stabilizing oil prices and new investment money from 401(k) and pension funds have contributed to the market's gains in the new year.

"We probably can hold onto it," he said of the 2006 rally. "If companies can continue to weather this energy surge, operate in a higher interest rate environment and create jobs, the market should be able to continue this rise."

Still, the market faces tests in the days ahead -- key economic data on retail sales and wholesale prices later this week, as well as the upcoming fourth-quarter earnings season.

Broader stock indicators were also at multiyear highs Monday. The Standard & Poor's 500 index rose 4.70, or 0.37 percent, to 1,290.15, a 4 1/2 year high; the Nasdaq composite index added 13.07, or 0.57 percent, to 2,318.69, its best close since Feb. 20, 2001.