US stocks extended their post-election rally on Thursday, pushing the S&P 500 Index to its highest close for more than two years as oil prices tumbled below $49, while tobacco and food company Altria Group Inc surged after its CEO said it may split itself up. Altria supported the Dow, leaping 8.5 percent, or $4.23 to $54.23, while its majority-owned foods business, Kraft Foods Inc rose 3.3 percent, or $1.09 to $34.52.
A drop in oil prices helped the broader market by alleviating some concerns about the impact that high crude prices have on corporate profits. That boosted industrials such as Dow component 3M Co, up $2.79 at $78.08.
"The markets have taken on new life prompted by the election results and the slide in crude," said Harry Michas, stock-index futures trader at manmarketmonitor.com.
The Dow Jones industrial average jumped 177.71 points, or 1.75 percent, to close at 10,314.76. The Standard & Poor's 500 Index rose 18.47 points, or 1.62 percent, to end at 1,161.67. The technology-laced Nasdaq Composite Index gained 19.30 points, or 0.96 percent, to finish at 2,023.63, based on the latest data.
The S&P 500 closed at its highest level since March 2002, scoring its biggest gain since March 2004. The Dow closed higher for the seventh time out of the last eight sessions, posting its biggest rise in 13 months.
Mixed reports about Palestinian President Yasser Arafat, who was fighting for his life in a French hospital on Thursday, may have helped stocks, on speculation that a change of leadership may increase stability in the region.
"People are believing that that might create a little bit of stability over there," Tracy said.
The 75-year-old leader went into a coma overnight. Aides said he was in a critical condition but denied he was dead.
Overall, trading was heavy, with 1.79 billion shares changing hands on the New York Stock Exchange, above the 1.4 billion daily average for last year. About 1.82 billion shares were traded on Nasdaq, above the 1.69 billion daily average last year.
Advancers outnumbered decliners on the NYSE by a ratio of about 3 to 1, and on the Nasdaq, by three to two on Nasdaq.
The dollar inched toward record lows against the euro on Thursday as traders worried about the growing US current account deficit and other problems in the US economy. The euro was trading at $1.2861, up 0.34 percent on the day.
COMEX December gold futures closed higher - at $430.80 an ounce - but off the morning's 16-year peak at $434, as a tumbling dollar after the election prompted investors to buy the safe-haven metal.
Retailers' shares boosted the Dow and the S&P 500, after a number of top shops reported a pickup in sales as cooler weather drove consumers into stores in October.
Wal-Mart Stores Inc leaped 3.3 percent, or $1.78 to $56.26, after saying earnings would be at the high end of its estimated range. Wal-Mart also benefits from declining oil prices as lower gasoline prices increase its customers' spending power.
Meanwhile, shares of Gap Inc jumped 9.4 percent, or $1.90 to $22.14. The retailer reported an increase of 3 percent in October same-store sales, surpassing analysts' average forecast for a 1 percent gain. The S&P apparel retailer index was up 5.8 percent.
But a downgrade of chip equipment makers by Banc of America Securities hurt companies like KLA-Tencor Corp, down 18 cents at $44.84.
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