NEW YORK - Wall Street extended its October rally Monday as investors grew more optimistic about upcoming earnings reports and Wal-Mart Stores Inc. said it will cut capital spending to drive overall returns.
The Dow Jones industrials shot up more than 110 points and crossed 12,100 for the first time.
Generally upbeat reports have instilled a new confidence about the future in investors, and allowed them to lay down some bets about the future just half-way through third-quarter earnings season.
Meanwhile, 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. Wall Street, which has leaned on Wal-Mart to be more prudent in its expansion, sent the Dow component up more than 5 percent, its biggest advancer during the session.
Blue chips resumed a three-month rally after stalling Friday; the Dow briefly surpassed 12,100 and reached a new trading high of 12,117.95, eclipsing the old mark of 12,049.51 set last week. Broader market indexes also gained, shrugging off concerns about the Federal Reserve's decision on interest rates later this week.
"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. 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 stand to benefit if consumers have more spending money.
In midday trading, the Dow Jones industrial average rose 110.22, or 0.92 percent, to 12,112.59. Blue chips passed 12,000 for the first time last week.
Broader stock indicators also surged. The Standard & Poor's 500 index rose 8.71, or 0.64 percent, to 1,377.71, and the Nasdaq composite index rose 17.71, or 0.76 percent, to 2,360.01.
The advance comes despite some concerns about the Fed's meeting on Wednesday. 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 4.85 percent form 4.79 percent on Friday.
The dollar was mixed against other major currencies, while gold prices fell. A barrel of light sweet crude fell 88 cents to $58.45 on the New York Mercantile Exchange.
"Wal-Mart is contributing 15 points to the Dow, and now you're seeing others in the retail sector moving along with it," said Scott Fullman, director of investment strategy for Hapoalim Securities USA. "I think this is a big because the market is getting another source of fuel to push it higher."
Wal-Mart said 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 $1.67, or 3.4 percent, to $51.04.
Also propelling blue chips was International Business Machines Corp., which 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 $1.09 to $91.57, while Amazon advanced 12 cents to $32.69.
AT&T Corp. fell 12 cents to $34.32 despite 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 12 cents to $7.89 after posting its largest quarterly loss in more than a decade. The trouble automaker's took a massive charge during the period to cover a restructuring plant that will shutter 16 plants and cut as many as 45,000 jobs.
Advancing issues outnumbered decliners by about 3 to 2 on the New York Stock Exchange, where volume came to 668 million shares.
The Russell 2000 index of smaller companies rose 2.47, or 0.32 percent, to 764.60.
Overseas, Japan's Nikkei stock average closed up 0.82 percent. Britain's FTSE 100 was up 0.18 percent, Germany's DAX index rose 0.65 percent, and France's CAC-40 advanced 0.68 percent.