Indexes Climb to New Highs

Major stock indexes pushed ahead Wednesday to new multiyear or all-time highs as investors continued to bet on solid growth in the economy and corporate earnings this year.

Wall Street advanced despite higher oil prices, another rise in long-term Treasury bond yields and a disappointing fourth-quarter profit projection from chemical giant DuPont.

But the breadth of the new year’s rally -- the number of rising stocks versus the number declining -- continued to narrow, suggesting that the market’s momentum was slowing.

Winners topped losers by about 5 to 4 on the New York Stock Exchange.

Still, the Dow Jones industrial average added 31.86 points, or 0.3%, to 11,043.44, its highest close since June 2001. That brought the Dow’s year-to-date gain to 325 points, or 3%.

The broader NYSE composite index set another in a string of record highs, gaining 32.92 points, or 0.4%, to 8,063.51. It is up 4% this year.

Technology shares continued to pace the rally as brokerage analysts touted stocks including Apple Computer and chip maker Broadcom.

The tech-dominated Nasdaq composite index was up 11.04 points, or 0.5%, to 2,331.36, nearly a five-year high. It’s up 5.7% this year.

“Tech is once again leading the market,” said Owen Fitzpatrick, head of the U.S. equity group at Deutsche Bank Private Wealth Management. “There’s the belief that the corporate spending cycle is going to pick up steam.”

Shares of many brokerages and money managers also rose sharply, reflecting widespread expectations that the Federal Reserve soon would halt its credit-tightening campaign, analysts said. Financial services companies tend to fare best when interest rates are level or declining.

Money manager Legg Mason jumped $3.69 to a record $130.40; brokerage Bear Stearns surged $2.07 to $121.31, also a record.

Stocks had struggled to find direction in the first half of the session, but buyers took control in the second half.

Some analysts attributed the midday turnaround to comments from New York Federal Reserve Bank President Timothy Geithner, who said in a speech that the core U.S. rate of inflation was “quite moderate.” That bolstered hopes that the central bank might indeed be nearly done raising short-term interest rates.

Geithner also suggested that changes in prices of assets such as stocks would become more important in the future in helping to shape Fed rate policy.

Such a shift could mean that the central bank would decide to raise rates if it believed that markets had become overvalued -- or cut rates if it believed markets had become undervalued.

In the near term, investors appear increasingly confident that the Fed won’t raise rates much further. A key catalyst for the new year’s rally was the release Jan. 3 of the minutes of policymakers’ December meeting. The minutes indicated that most Fed members believed that “the number of additional firming steps required probably would not be large.”

The Dow soared 129 points Jan. 3 and has been up every day but one since then.

The bullish outlook for the market is that interest rates will level off, allowing the economy to continue growing and with it corporate earnings.

Companies in the Standard & Poor’s 500 index are expected to report fourth-quarter operating earnings growth of 13.4%, according to data tracker Thomson Financial. Year-over-year growth is expected to be 12.4% in the first quarter, Thomson says.

But some profit previews from large industrial firms this week have been downbeat. DuPont on Wednesday estimated its fourth-quarter earnings at 10 cents a share, well below analysts’ consensus expectation of 24 cents. DuPont said higher raw materials costs were partly to blame.

The stock, one of the 30 members of the Dow index, sank $1.41 to $41.14.

The market also had to contend with another rise in oil prices. Near-term crude futures in New York ended at $63.94 a barrel, up 57 cents, after Iran’s decision to resume research on uranium reprocessing raised the prospect of Western sanctions on the second-biggest supplier in the Organization of the Petroleum Exporting Countries. Oil is up 4.8% this year.

Also, long-term Treasury bond yields rose again, after the Treasury’s auction of $13 billion in new five-year notes drew disappointing demand. The notes were sold at a yield of 4.37%.

The 10-year T-note ended at 4.46%, up from 4.43% on Tuesday and the highest since Dec. 21.

Among the day’s highlights:

* The S&P; 500 index gained 4.49 points, or 0.4%, to 1,294.18, its highest close since May 2001. Indexes hitting record highs included the small-stock Russell 2,000 and S&P;’s gauge of mid-size stocks.

* Apple Computer jumped $3.04 to a record $83.90 after brokerage Credit Suisse First Boston raised its share-price estimate to $90 from $82. Apple on Tuesday said its sales last quarter hit a record $5.7 billion.

Irvine-based Broadcom rose $2.86 to $58.59. Brokerage UBS boosted its rating to “buy” from “neutral,” saying Broadcom’s profit would get a lift from sales of Apple’s iPod. Broadcom makes chips for the devices.

* In the financial sector, Lehman Bros. surged $2.97 to $134.65, Morningstar jumped $3.25 to $40.85, and T. Rowe Price gained $1.85 to $76.43.

* Airline stocks were among the day’s losers on energy-cost concerns. Continental slid $1.08 to $20.41. Alaska Air fell $2.19 to $33.35.