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Dow Smashes 13,000 for First Time in Broad Stock Rally

The Dow ripped through the 13,000 level with a 135-point gain as stocks rallied across the board on strong earnings reports and positive news from aluminum giant Alcoa.

"The momentum in the equities market is looking really good," said Alec Young, equity market strategist at Standard & Poor's. "We were expecting earnings growth of about 3% and we've seen double that."

Alcoa, the world's largest aluminum producer, said it will explore strategic alternatives for its packaging and consumer segment, as well as its electrical and electronic solutions, and automotive castings business.

Alcoa's gains of 5.3% fueled a new closing high for the Dow Jones Industrial Average, which saw 29 of 30 components close in positive territory. The blue chip index has gained in 17 of the last 19 trading sessions with a gain of 6.4% during that stretch.

The Nasdaq hit a 6-year high, while the S&P 500 traded at almost a seven-year high. The Nasdaq and S&P 500 have each seen year-to-date gains of about 5.5% while the Dow has gained 5.0%.

219 companies in the S&P 500 have already reported quarterly earnings with 69% beating analysts' expectations, according to Thomson Financial.

"Earnings look terrific, the economy seems to be in decent shape, inflation is under control and valuations remain very attractive," said John Buckingham, chief portfolio manager at Al Frank Asset Management. "I'm still very optimistic."

Shares of Amazon.com surged more than 25% after the online retailer said late Tuesday first-quarter profit more than doubled, beating analyst estimates. The company also boosted its revenue outlook for the year.

Investors shrugged off a rise in oil and weaker-than-expected new home sales, as transportation stocks and utilities confirmed the historic high in the benchmark Dow. The Russell 2000 index of small cap stocks also ended at a new high.

Energy was the best sector performer due to rising crude futures, which rose 2% following an unexpected drawdown in gasoline inventories.

Buying was across the board on Wednesday with 10 sectors in the S&P 500 trading higher, six groups closed with gains of 1% or more. Advancing stocks outpacing decliners by more than two to one on the NYSE.

"The advance-decline lines are reaching new highs, this is a broad-based move here," Stephen Porpora, managing floor broker at William O'Neil, told CNBC. "That's what sticks in my head the most."

Sun Microsystems was the day's notable laggard with shares falling more than 10%. The network company announced on Tuesday after the close a third-quarter loss and quarterly sales that came in below analysts’ expectations.

Boeing said first-quarter net income rose to $1.13 a share, topping the $1.02 forecasted by analysts. The aerospace company's 2007 and 2008 guidance came in below expectations, however.

Shares of Corning rose amid a surge in trading volume following the specialty glass maker's solid quarterly earnings report. Corning said first-quarter earnings rose 27% and forecasted better-than-expected earnings for the second-quarter, as it expects higher sales of LCD televisions.

PepsiCo said its first-quarter profit rose 16% on the strength of its international beverage and Frito-Lay snacks divisions. The world's second-largest soft drink maker reported profits of 65 cents a share, compared with analysts' estimate of 61 cents a share.

The dollar fell to a record low against a basket of major currencies, reflecting prospects for slower growth in the U.S. economy. The Federal Reserve's trade-weighted daily index of the dollar valued against a basket of seven currencies declined to 78.99.

Europe Rallies, Asia Sinks as Nikkei Declines 1%

The London FTSE-100, Paris CAC-40 and Frankfurt DAX all closed higher.

A consortium led by Royal Bank of Scotland launched a $98 billion bid proposal for ABN Amro, in an attempt to trump the agreed takeover between the Dutch bank and Britain's Barclays.

German engineering and technology firm Siemens preannounced quarterly earnings, saying profit rose 36% in the second quarter.

In France, Air Liquide, an industrial gases group, missed first-quarter sales expectations with a 0.6% rise, but the company maintained its profit outlook. The company’s share price declined.

Tokyo's Nikkei 225 Average finished over 1% lower as KDDI tumbled after concerns about the mobile phone operator's capital spending plans prompted a brokerage downgrade. Daihatsu Motor, the minivehicle unit of Toyota Motor , extended its losses after saying its operating profit could fall in the year that started in April.

Canon rose after the maker of office equipment and cameras posted a 22% rise in quarterly operating profit and raised its full-year forecast by 3%.

South Korea's Kospi Index ended down from a record following disappointing earnings results from KTF and other companies.

Hong Kong blue chips fell, tracking weak Asian markets, as Li & Fung and other exporters slid after the latest U.S. economic data pointed to slowing growth in the world's biggest economy.

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