updated 11/14/2006 7:21:07 AM ET 2006-11-14T12:21:07

Wall Street extended its November rally into a new week Monday, betting that an upcoming series of economic reports will show strength in the overall economy with inflation contained.

Major Market Indices

Comments from Federal Reserve Bank of Dallas President Richard Fisher put investors at ease about upcoming economic and retail sales reports. He said the economy continues to grow strongly, and he did not indicate that inflation was presenting a problem.

Stocks have risen six out of the past seven weeks as oil prices continued to tumble, helping lift sectors that typically are large energy consumers. Lower energy prices are viewed as a boost for consumers, especially heading into the holiday shopping period.

“There is a tremendous amount of momentum built into the market,” said Steven Goldman, chief market strategist for Weeden & Co. “We’ve had a good run, we’ve consolidated, and we need this acceleration going into the holidays.”

He pointed out that technology stocks continue to drive the market higher, with both Intel Corp. and Dell Inc. pushing the Nasdaq near to a 6-year high. Merck & Co. helped lead the Dow Jones industrials after it said one of its painkillers did not result in increased risk of heart attacks.

In late afternoon trading, the Dow Jones industrial average rose 27.05, or 0.22 percent, to 12,135.48.

Broader stock indicators also gained. The Standard & Poor’s 500 index was up 4.89, or 0.35 percent, to 1,385.79, and the Nasdaq composite index rose 15.80, or 0.66 percent, at 2,405.52.

Fisher’s speech in San Antonio had little impact on the bond market, which, like Wall Street, is still awaiting the Tuesday release of the Labor Department’s Producer Price Index and the Commerce Department’s retail sales data. Bonds were weaker, with the yield on the benchmark 10-year Treasury note rising to 4.61 percent from 4.59 percent late Friday.

Oil prices declined, with a barrel of light sweet crude down $1.01 at $58.58 on the New York Mercantile Exchange. The dollar was mixed against other major currencies, while gold prices fell.

“We got an awful lot of data, an extremely busy calendar,” said Stephen Massocca, president of Pacific Growth Equities. “The drop in oil has helped the market quite a bit, positive comments from the Dallas Fed, and an upgrade of the semiconductor group. There really hasn’t been anything on the bear side at all.”

The only negative piece of data released Monday came after the Treasury Department said the federal government started out its new budget year in October with a slightly higher deficit than last year. Revenues and spending both set records.

Intel led both the Nasdaq and Dow Jones industrials, rising 45 cents, or 2.2 percent, to $21.03. The world’s largest maker of chips for computers benefited after Citigroup upgraded the entire semiconductor sector.

Dell, which reports earnings this week, rose 83 cents to $25.72 after being upgraded by Deutsche Bank. The bank told clients it expects the company’s shares to hit $28 within the next 12 months.

Tyson Foods Inc. spiked 64 cents, or 4.5 percent, to $14.99 after saying it expects to return to profitability this fiscal year. The company had reported a fourth-quarter loss due to one-time charges and losses in the chicken and beef sectors.

Merck up 24 cents to $43.36 after saying its new arthritis painkiller is safer than Vioxx. Rival Novartis AG shed 98 cents to $58.38 after the Swiss company disclosed in a filing with the Securities and Exchange Commission delays with its Galvus drug.

A memo leaked to The Wall Street Journal stated that Toyota hopes to gain a 15 percent market share by targeting Russia, India, China and Brazil. However, the stock gave up 83 cents to $120.99. General Motors Corp. rose 40 cents to $35.07.

Gannett Co. picked up 94 cents to $60.10 on reports the media company is interested in acquiring rival Tribune Co. , whose shares rose 46 cents to $32.49.

The Russell 2000 index of smaller companies was up 3.37, or 0.44 percent, to 772.52.

Advancing issues barely outnumbered decliner by about on the New York Stock Exchange, where volume came to 930.8 million shares.

Overseas, Japan’s Nikkei stock average closed lower 0.55 percent. At the close, Britain’s FTSE 100 was down 0.22 percent, Germany’s DAX index was up 0.57 percent, and France’s CAC-40 was up 0.79 percent.

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