Modest but steady gains from US stocks in the past few weeks have sparked trader talk that the blue-chip Dow could soon breach 11,000, a level not seen in more than 3-1/2 years. The Dow Jones industrial average is fractionally higher for the year to date, according to figures obtained after the close of trading on Friday. It has gained 2.8 percent over the past month, and chart analysis of the index shows it has established substantial positive momentum during its current run.

"I think 11,000 is in people's sights as a reasonable target and will become much more in people's sights when the averages start to break through their December highs, which we were right at a couple of days ago," said Ken Tower, chief market analyst at Cybertrader, a subsidiary of Charles Schwab Corp.

If the Dow hits 11,000, it will revive chatter of the average being within striking distance of its all-time high. At 11,000, blue chips would be just 6 percent shy of their all-time high of 11,750.28 on January 14, 2000.

Carving out new highs would mark a comeback for the Dow, which was the weakest performer last year against the Standard & Poor's 500 Index and the Nasdaq Composite Index. For 2004, the Dow rose 3.2 percent, the S&P 500 gained 9 percent, and the Nasdaq Composite Index rose 8.6 percent.

So far this year, the Dow has asserted a degree of leadership, partly helped by strength in energy company Exxon Mobil Corp, which has gained as oil prices remained well above $40 a barrel. While the S&P and Nasdaq are negative for the year so far, the Dow is a fraction ahead. The Dow rose to 3-1/2-year closing highs in December.

Copyright Reuters, 2005