Stocks back on track; Dow rises to '09 high

NEW YORK - Investors popped the stock market's rally back in gear yesterday after analyst upgrades boosted their optimism about the economy.

A 36-point advance in the Dow Jones industrial average left the index at a high for the year and with a gain of 215 points for the week.

The market got a boost from an economic forecast at Barclay's Capital, which raised its projection for growth in the nation's gross domestic product for the first three months of next year to 5 percent from 3 percent. GDP has been shrinking, although many economists think it will return to growth for the July-September quarter.

Meanwhile, Procter & Gamble Co. pulled the Dow higher after an analyst raised her rating on the consumer-products company in part because of its price-cutting strategy.

The market's climb came a day after a pullback that did little to quiet analysts' calls for a break in the market's run.

Marc Harris, co-head of global research for RBC Capital Markets in New York, said the strength of the rally had surprised many investors because some of the stocks posting the biggest advances were lower-quality companies with weak balance sheets.

"Even turkeys are going to fly in a hurricane," Harris said. "Those lower-quality companies are leading the charge here."

Financial companies and home builders have been among the biggest gainers recently. Many still face major hurdles with bad debt and the weak housing market.

Many analysts expect the market's run will slow - but not necessarily stop - as investors shift holdings from industries where the gains have been strong, like technology, to areas that have lagged.

The Dow rose 36.28, or 0.4 percent, to 9,820.20, its highest close since Oct. 6, when it finished at 9,955.50.

The broader Standard & Poor's 500 index rose 2.81, or 0.3 percent, to 1,068.30, while the Nasdaq composite index advanced 6.11, or 0.3 percent, to 2,132.86.

The Dow's gain of 2.2 percent for the week was its best gain since the week ending July 24. The S&P 500 index and the Nasdaq advanced 2.5 percent.

The dollar rose against other major currencies, while gold slipped.

P&G rose $1.79, or 3.2 percent, to $57.32 after its upgrade from Citi Investment Research.