The Dow rose for a sixth straight session Wednesday as the dollar hit a new 15-month low after Federal Reserve officials reinforced the view that rates will remain low for some time.
The dollar rebounded by the close but stocks held onto their gains. Also giving the market a boost was strong Chinese data on factory output and retail sales.
But the gains weren't as blockbuster as they were in the past week: The Dow Jones Industrial Average gained just 44.29, or 0.4 percent, to close at 10,291.26. It's the third straight session the Dow has set a 13-month high but two of its recent gains were 200-plus.
Financial, material and IT stocks were the biggest gainers. The S&P 500 rose 0.5 percent to a fresh 13-month high just shy of 1,100, while the Nasdaq advanced 0.7 percent.
Many businesses and the bond market were closed today for the Veterans Day holiday, though the stock market was open for a normal trading session.
Weekly data on mortgage applications and crude inventories, typically released on Wednesdays, were postponed until Thursday this week due to the Veteran's Day holiday today.
The Dow has gained more than 500 points in the past six sessions but some market pros say it may be maxing out.
"The rally in the markets is a faux rally—there's nothing that is substantiating the recent run-up. It's based on pure emotion and momentum, and it's triggered by a 'herd mentality' that people are going to miss out on future gains if they don't jump in now—regardless of the fundamentals, or lack thereof," said Todd Schoenberger, managing director of LandColt Trading in San Antonio. "Until spending increases, stock valuations will continue to be vulnerable."
Financials led the pack today, with Bank of America at the top of the Dow, up 2.5 percent.
AIG, however, skidded 2.2 percent after the Wall Street Journal reported that CEO Robert Benmosche told the board he was "done" with the job.
Shares of Applied Materials rose ahead of earnings from the chip-equipment maker, released after the closing bell.
AMAT hit it out of the park: It beat on both the top and bottom lines, announced plans to cut jobs globally and said it expects sales to jump 30 percentnext year.
The results, coupled with a report earlier this week from the Semiconductor Industry Association that it expects chip sales to rise more than 10 percent next year, bode well for techs heading into Thursday's trading session.
Some surprise M&A news from tech after the bell: Hewlett-Packard announced plans to buy 3Com for $2.7 billion. The deal is seen as a shot across the bow at networking-gear maker Cisco, which competes with 3Com.
Wal-Mart shares rose 1.3 percent after the discount giant said it will offer a $100 gift card to shoppers who buy BlackBerrys and an assortment of devices that go with the smartphones. Shares of Research In Motion , which makes the BlackBerry, rose 1.7 percent.
Garmin shares , which have been hammered in recent weeks over the Droid phone's free navigation system, have started to crawl back in the past few days, up 2.4 percent today.
Macy's shares tumbled after the department-store operator beat market expectations but thwarted any enthusiasm with a downbeat outlook for the holiday quarter.
Toll Brothers shares soared 16 percent after the homebuilder reported a 42-percent jump in new contracts as cancellations declined.
The rest of the sector also rallied, with many homebuilder stocks up 5 percent or more. percent.
Among other reasons for renewed optimism: upbeat comments by executives of both FedEx and UPS about the upcoming holiday season.
- UPS Sees Better Holiday Demand
The dollar dropped to a 15-month low but Treasury Secretary Tim Geithner said a strong dollar is key to the recovery.
"I believe deeply that it's very important to the United States, to the economic health of the United States, that we maintain a strong dollar," Geithner said in a meeting with Japanese reporters at the U.S. embassy.
In deal news, United Technologies reportedly is close to purchasing a unit of General Electric for $1.8 billion, Bloomberg reported.