Wall Street stocks launched the new trading year with gains of 1 percent or more on Monday, extending the late-2010 rally on optimistic signs about a global economic recovery.
The Nasdaq 100 <.NDX> hit a 10-year high, driven largely by gains in Apple Inc
Stocks got a lift from the January effect when fund managers are no longer engaged in year-end window dressing and instead focus on stocks they find attractive.
Bolstering the economic picture, data showed the U.S. manufacturing sector grew for a 17th straight month in December, while U.S. construction spending increased in November to its highest level since June.
The global outlook also received a boost after data showed China's factory inflation cooled in December, easing concerns the government would raise interest rates or take other steps to control growth.
U.S. stocks ended 2010 with double-digit gains, with the S&P 500 recording its best December since 1991. The gains marked a recovery to before the fall of Lehman Brothers in September 2008.
The January effect I think is strong, following some momentum late in the previous year, said Bryant Evans, investment adviser and portfolio manager at Cozad Asset Management in Champaign, Illinois.
The Dow Jones industrial average <.DJI> was up 124.76 points, or 1.08 percent, at 11,702.27. The Standard & Poor's 500 Index <.SPX> was up 17.63 points, or 1.40 percent, at 1,275.27. The Nasdaq Composite Index <.IXIC> was up 48.18 points, or 1.82 percent, at 2,701.05.
Evans said in January many investors ask themselves, What am I going to do with my cash? Part of it is the tax year is over, and corporations and people have a better idea of how much money they have to invest.
The Nasdaq 100 hit an intraday high of 2268.30, its highest level since February 2001.
For 2010, the S&P rose 12.8 percent, the Dow Jones industrial average <.DJI> climbed 11 percent, and the Nasdaq <.IXIC> surged 16.9 percent.
From its July low the S&P has risen 23 percent, boosted by improving economic data, positive earnings reports and stimulus measures by the U.S. Federal Reserve.
Among stocks, Bank of America Corp
Other top advancers included Alcoa Inc
(Reporting by Caroline Valetkevitch; Editing by Kenneth Barry)