Dow Nears The 9,000 Mark

U.S. stocks, fueled by avid foreign buying and stepped-up retirement inflows into mutual funds by investors, hit new records Thursday.

The Dow Jones Industrial Average surged 118.32 points, or 1.3 percent, to 8,986.64, bettering March 24's prior record close of 8,904.44.

Since bottoming Jan. 12, the barometer has vaulted an astonishing 1,539.25 points, or 20.7 percent, as fears of a profits slowdown have ebbed.

The Standard & Poor's 500 Index rose 1.1 percent to a new record.

The Nasdaq Composite advanced 0.3 percent and the Russell 2000 index climbed 0.3 percent, both new records. Advancing issues led decliners by 39 shares in the Nasdaq Stock Market.

"The new highs in the Nasdaq Composite and Russell 2000 indexes tell us that the buying interest is fanning out into the medium and smaller stocks," said Robert Stovall, president of Stovall/21st Advisers. "This is something that has to happen to keep the market moving."

Many U.S. investors are scrambling to fund retirement accounts before the April 15 deadline for filing income tax returns.

Given the sharp run-up in share prices this year, mutual fund managers are forced to immediately invest any cash inflows--or risk underperformance vs. the benchmark that they are paid to beat.

The day's action came as a widely-watched report on investor sentiment indicated a historically low level of bearish advisors.

"The latest Investor's Intelligence sentiment survey shows a four-year low in bearish sentiment," noted Peter Green, technical strategist at Gruntal & Co.

"Traders should use caution," Green advised.

Within the market, a bullish sign was the 1.7 percent move by the Dow Jones Utilities Average, historically an excellent leading indicator of market direction.

Elsewhere, gold- and silver-mining stocks padded their gains of late on growing sentiment that price inflation has bottomed, while the healthcare sector was bolstered by a solid performance in the biotechnology group.

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