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Dow Ends Higher but Falls Short of 11,000

Monday, 5 Apr 2010 | 5:19 PM ET

The Dow ended higher Monday as investors cheered some encouraging economic readings, including Friday's jobs report, but fell short of the 11,000 some had expected. The market was a beehive of spring activity, buzzing about the Fed and interest rates.

The Dow gained 46.48, or 0.4 percent, to close at 10,973.55.

Some market pros said the Dow may not reach 11,000 for a few weeks.

"There's a little bit of resistance," said Doug Roberts, the chief investment strategist at Channel Capital Research.

One market watcher is already over Dow 11,000 and on to 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 S&P 500gained 0.8 percent, while theNasdaq was the best performer of the three, up more than 1 percent.

Both the Dow and the S&P closed at their highest since September 2008, while the Nasdaq logged its highest finish since August 2008.

Energy, financials and techs were among the leading sectors. American Express and DuPont wereat the front of the Dow pack.

In today's economic news, 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.

The Fed held 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 said it wasn't likely to happen again (remember the Fed's surprise move in February raising the discount rate) and even if it did — it wouldn't have that big an impact on the market.

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

Apple gained more than 1 percent 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.

Amazon , maker of the rival Kindle device, slipped, as did Research In Motion. But Google pushed higher.

Chip maker Cree shot up 10 percent after UBS raised its rating on the stock to "buy."

The Philadelphia Stock Exchange semiconductor index was up about 3 percent.

Several regional banks posted strong gains, including Regions Financial , Zions Bancorp and Fifth Third after Deutsche Bank upgraded its ratings on the stocks, saying the commercial real-estate market has probably already bottomed and the much-hyped crash isn't going to happen.

Energy stocks spiked as oil jumpedtonear $87 a barrel to its highest level in 18-months on bets that demand will rise as the economy recovers.

Noble Energy and Halliburton were both up more than 2 percent.

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

The yield on the 10-year Treasury note touched 4 percent for the first time since last summer.

Alcoa shares fell after Deutsche Bank downgraded its rating on the stock to "hold" and slashed its full-year earnings target for the aluminum giant due to several EU fines and concerns over a weak first quarter.

Alcoa is scheduled to report earnings next Monday, marking the unofficial start to earnings season.

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

Aside from the jobs report, the other buzz in currency markets was 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.

Harley-Davidson shares jumped 10 percent to a 2 1/2-year high after an analyst upgrade.

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

Most major retail chains are slated to report same-store sales on Thursday.

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.

Meanwhile, Toyota shares rose about 1 percent as investors shrugged off news that the U.S. is slapping the company with a $16 million fine — the largest ever on an automaker— for failing to promptly notify the government about defective gas pedals.

Trading volume was light on this Monday after the three-day holiday weekend: About 7 billion shares changed hands on the three major exchanges, more than 2.5 billion less than usual.

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.

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