Dow Jones hits
3 1/2-year high

NEW YORK » The stock market barreled higher yesterday, sending the Dow Jones industrials to a new 3 1/2-year high as two Wall Street firms reported better-than-expected earnings and a brokerage gave tech bellwether Intel Corp. a ratings upgrade.

The good earnings news, along with the Intel upgrade, set a positive tone for the market throughout the session. Stocks also benefited from the traditional "Santa Claus" rally, as mutual funds and money managers shuffle their portfolios before the year ends.

"The company news that we've seen over the past few days has been, on balance, positive, and that's giving investors the courage to buy," said Hugh Johnson, chief investment officer for First Albany Corp. "There's definitely some window dressing going on as well, where you have portfolio managers making sure they have good performing stocks in their portfolios before year's end. But for the most part, investors seem to be in a holiday mood."

Stocks have climbed steadily since the presidential election, with good economic data and positive profit forecasts for 2005 assuring investors of further returns.

The Dow rose 97.83, or 0.92 percent, to 10,759.43. It was the best close for the Dow since June 13, 2001, surpassing the previous 2004 high of 10,737.70 set on Feb. 11.

Broader stock indicators also made substantial gains. The Standard & Poor's 500 index was up 10.80, or 0.9 percent, at 1,205.45, just below the 3 1/2-year high of 1,205.72 set a week ago. The Nasdaq composite index gained 23.06, or 1.08 percent, to 2,150.91, less than 12 points shy of a week-ago multiyear high.

Barry Berman, head trader for Robert W. Baird & Co. in Milwaukee, said the market was being driven by an overall positive outlook for the economy, lower oil prices, historically low interest rates as well as seasonal buying that tends to lift shares in the last weeks of the year.

"There's a lot of positives going on right now," Berman said. "Even on the days where there has been bad news, the market has rebounded really well."

The tech sector got a lift after Lehman Brothers upgraded Intel Corp. to "overweight," citing improved forecasts for spending in 2005. That cheered many investors who have been leery of building inventories and slow sales among a variety of technology companies.

On the strength of Lehman's upgrade, Intel Corp. gained 79 cents to $23.49, while rival Advanced Micro Devices Inc. slipped 11 cents to $21.73.