The Dow crossed five figures Wednes-day, seven months after it hit a 12-year low of 6,547.05 on March 9.

The comeback by the stock market's best-known indicator is the most visible sign yet that investors believe the economy is recovering from the financial crisis and recession.

Cheering erupted from traders on the floor of the New York Stock Exchange as stocks first moved above the psychological barrier.

The Dow rose 144.80, or 1.5 per cent, to 10,015.86.

The Standard & Poor's 500 index rose 18.83, or 1.8 per cent, to 1,092.02, and the Nasdaq composite index rose 32.34, or 1.5 per cent, to 2,172.23.

"People feel more comfortable and feel like there's less risk in the market when you get above a psychological point like 10,000," said Carl Beck, a partner at Harris Financial Group.

Final push

Upbeat earnings reports from chip maker Intel Corp and banker JPMorgan Chase & Co Wednesday gave the Dow its final push past 10,000.

Investors are increasingly shaking off lingering doubts about the eco-nomy. However, analysts still warn that problems like rising unemployment and a weak housing market pose a threat to a solid recovery.

The Dow is now up 53 per cent from its March low. But it remains 29 per cent below its peak of 14,164.53 hit in October 2007.

The index first finished above 10,000 on March 29, 1999, in the midst of a powerful rally that ended with the dotcom bust at the start of this decade.

Stocks then fell below that mark last October as investors sold stocks in a feverish panic following the downfall of Lehman Brothers.

The latest round of earnings reports, which will continue to pour in over the next few weeks, is the key to keeping the market's rally alive, analysts say. If earnings fall short of expectations, stocks could stumble.

JPMorgan Chase, the first major bank to report third-quarter earnings, stoked the market's optimism as it easily beat Wall Street's expectations, reporting a profit of US$3.59 billion for the July-September period.

The bank also achieved record year-to-date revenue.

Investors didn't seem fazed that JPMorgan, considered one of the strongest financial institutions throughout the economic crisis, doubled the amount of money it set aside during the quarter to cover failed home and credit card loans.

"Better-than-expected is a win," said Peter Schwartz, principal at Gregory J. Schwartz & Co. "People's expectations have been calibrated to buffer some of the bad news."

Drop in profits

Intel also beat analysts' estimates, reporting a smaller-than-expected drop in profits and sales after the market closed Tuesday.

The leading chip maker said it expects sales in the final period of the year to top projections, raising hopes that the computer market is improving.

Together, the reports quieted fears that major US companies won't be able to boost profits through sales growth and not just massive cost-cutting, which was a main driver behind the improvement in second-quarter results.

- AP