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Dow Backs Off 11,000 Amid Fed Rate Buzz

The Dow inched toward the 11,000 mark Monday as investor cheered some encouraging economic readings, including Friday's jobs report. The market was a beehive of spring activity today, buzzing about the Fed and interest rates.

The Dow was up more than 30 points and within shooting distance of the key 11,000 mark, but hovering in a tight range.

Energy, financials and techs were among the early leaders. American Express and Caterpillar wereat the front of the Dow pack.

Despite market expectations that the Dow may reach 11,000 today, Doug Roberts of Chief Investment Strategist at Channel Capital Research said the blue-chip index won't cross that threshold won't happen for another few weeks.

"There's a little bit of resistance," Roberts said. "Right now, you have a lot of people who are still uncertain and underwater." Instead, he noted that the S&P 1,200 is "more significant" and will happen over the next month or two as additional money gets pumped into the market.

One market watcher has his eye on the next benchmark.

"We may get a correction this spring but the bull market will resume," said Peter Morici, an economist and professor at the University of Maryland. "Quite simply, Goldilocks has come to roost on Wall Street — The Dow is headed for 12,000by year end," he said.

The energy sector rose, with Noble Energy and Halliburton shares jumping almost 3 percent, as oil jumpednear $87 a barrel to its highest level in 18-months on bets that demand will rise as the economy continues to recover.

Meanwhile, goldprices were modestly higher, while the dollar retreated from a seven-month high.

The ISM services index jumped to 55.4 in March from 53 in February. It was the third straight monthly gain and the industry's fastest pace of growth in nearly four years. And pending-home sales rose 8.2 percentin February.

This came after an encouraging jobs report: Employers added 162,000 jobsto nonfarm payrolls last month and the unemployment rate remained steady at 9.7 percent, the government reported on Friday. The market was closed in observance of the Good Friday holiday, so today was the first market reaction to the report.

Friday's jobs numbers are suggesting that the Fed may possibly raise rates in the fourth quarter, wrote Duncan Davidson, a blogger for Wall Street Pit.

“This timing for a rate increase should be bullish for stocks,” writes Davidson. “It seems good enough to support the 2010 earnings expectations but not so strong as to pull forward a Fed rate increase.”

The Fed is holding a board meeting — not a policy meeting today — but all that good economic news of late put a bee in the market's bonnet that policy makers may tinker with the discount rate. Though, most market pros say that's not going to happen.

"This is more form over substance," Roberts said, adding that markets will largely be unaffected, regardless of the outcome.

The Fed rumors come ahead of the release of the minutes from the last policy meeting, due out on Tuesday afternoon.

Apple shares ticked higher as several brokerages raised their price targets and full-year estimatesfor the company after the launch of the iPad. The tech giant is also scheduled to host an event Thursday to show off the newest operating system software for the iPhone.

Meanwhile, shares of major competitors such as Google , Hewlett-Packard and Microsoft werealso higher.

Aside from the jobs report, the other buzz in currency markets is the reaction — or lack thereof — to the Obama administration's delay of a currency report that could have labeled Beijing a "currency manipulator." There's no official reaction from China as yet, with today marking a public holiday.

Warren Buffett's Berkshire Hathaway has topped a list of best-regarded U.S. companiesin a Reuters survey. Also notable is the rise of Ford Motor to 37th on the list from 51st a year earlier.

Alcoa shares rose despite a downgrade to “hold” fromDeutsche Bank. The analyst also reduced the aluminum giant’s full-year earnings target due to several EU fines and concerns over a weak first quarter. Alcoa is scheduled to report earnings next Monday.

Tesoro shares tumbled after also being downgraded to “hold” at Deutsche Bank and suffering a major fire at a Washington refinery.

Walgreen's shares rose after the drugstore said same-store sales rose more than 2 percent in March, helped by an early Easter holiday.

This Week:

TUESDAY: Fed's Kocherlakota speaks; 3-year auction; Fed minutes
WEDNESDAY: Weekly mortgage apps; weekly crude inventories; Fed's Dudley, Hoenig speak; 10-year auction; consumer credit; Earnings from Family Dollar, Bed, Bath & Beyond
THURSDAY: BOE, ECB announcements; weekly jobless claims; Fed's Kocherlakota speaks; 30-year auction; Earnings from Pier 1, Chevron (interim results)
FRIDAY: Wholesale trade

Send comments to cindy.perman@nbcuni.com.