Dow Jones average hits another high for the year so far

NEW YORK -- Investors barreled into stocks Wednesday after an upbeat report on industrial production raised hopes that the economy is strengthening.

The Dow Jones industrial average rose 108 points to another high for the year as General Electric Co. and International Business Machines Corp. jumped. It was the market's eighth gain in nine days.

The promising report from the Federal Reserve on industrial production came a day after Fed chairman Ben Bernanke said that the recession was likely over. Investors have been scooping up stocks for six months in anticipation of a rebound in the economy.

The central bank's report that industrial activity surged 0.8 percent in August topped expectations. The Fed also said the improvement in industrial production for July was twice what it had initially reported.

The report and rising commodity prices lifted shares of manufacturing companies like aluminum producer Alcoa Inc.

Other big gains came from financial stocks, which have been building momentum as they push above certain price levels watched by traders. GE, which has a large financial arm and often trades like a bank stock, jumped for a third day. American Express Co. and JPMorgan Chase & Co. rose more than 3 percent.

Money has been flowing into stocks as some professional investors rush to keep with the market's gains and fear being left behind.

"People are looking to play catch-up at this point," said Christian Bendixen, director of technical research at Bay Crest Partners LLC in New York.

The Dow rose 108.30, or 1.1 percent, to 9,791.71, its highest close since Oct. 6, when it ended at 9,956. The index is now up 11.6 percent for the year.

The broader Standard & Poor's 500 index rose 16.13, or 1.5 percent, to 1,068.76, while the Nasdaq composite index rose 30.51, or 1.5 percent, to 2,133.15.

The advance comes even as analysts warn that stocks are due for a correction. The S&P 500 index, the benchmark for many mutual funds, has surged 58 percent since it tumbled to a 12-year low in early March. Extended ascents tend to spook investors, who see it as a sign of indiscriminate buying.

Peter Schwartz, principal at Gregory J. Schwartz & Co. in Bloomfield Hills, Mich., expects stocks will rise but not without interruptions.

"We can't have this trajectory for perpetuity without speed bumps along the way," he said.

Jason Pride, director of research Haverford Investments in Radnor, Pa., would like to see more moderate gains but said the nature of markets is to overdo it. "The market can extend its speculation surrounding this economic rebound much longer than people expect," he said.

GE jumped $1, or 6.3 percent, to $17, extending its gain for the week and erasing its loss for the year. The company plans to update analysts on its business Thursday. IBM, which carries more weight in the Dow because of its higher stock price, rose $2.47, or 2.1 percent, to $121.82, its best close of the year.

Alcoa rose 48 cents, or 3.4 percent, to $14.47 after the report on industrial production.

Health insurers rose after Sen. Max Baucus of Montana introduced a Finance Committee version of a bill to revamp the nation's health care system. It would require most people to purchase insurance coverage and prevent insurance companies from charging more to people with more serious health problems.

UnitedHealth Group Inc. rose $1.59, or 5.7 percent, to $29.29, while Humana Inc. advanced $1.89, or 4.9 percent, to $40.67.

Home builder stocks surged after a builder confidence index from the National Association of Home Builders rose for the third straight month. Beazer Homes USA Inc. jumped 60 cents, or 14.2 percent, to $4.83 and Hovnanian Enterprises Inc. rose 41 cents, or 10.3 percent, to $4.41.

Newspaper stocks rose following a report from a market research company that signaled advertising spending wasn't eroding as quickly as it had been.

Gannett Co., the publisher of USA Today and other papers, advanced 93 cents, or 10.3 percent, to $9.99. The New York Times Co. rose 94 cents, or 11.9 percent, to $8.82.

Bond prices were mixed. The yield on the benchmark 10-year Treasury note rose to 3.48 percent from 3.46 late Tuesday.

The dollar extended its slide and commodities, including gold, rose. Commodities are priced in dollars and become less expensive when the dollar weakens.

Oil advanced after the government reported a large drop in crude supplies. Light, sweet crude rose $1.58 to settle at $72.51 per barrel on the New York Mercantile Exchange.

Five stocks rose for every one that fell on the New York Stock Exchange, where volume came to 1.6 billion shares compared with 1.5 billion Tuesday.

The Russell 2000 index of smaller companies rose 12.54, or 2.1 percent, to 617.38.

Overseas, Britain's FTSE 100 gained 1.6 percent, Germany's DAX index rose 1.3 percent, and France's CAC-40 rose 1.6 percent. Japan's Nikkei stock average rose 0.5 percent.