DOW REACHES 11,000; STOCK MARKET UP 1,000 IN 24 DAYS.

Byline: Gretchen Morgenson The New York Times

The Dow Jones industrial average blew past the 11,000 mark Monday, just 24 trading days after it topped 10,000 for the first time. The Dow average closed the day at 11,014.69, up 225.65 points.

The 10 percent move from March 29 to May 3 was not the fastest such rise in market history. But it was the quickest jump of 10 percent to come during a period of prolonged market strength. Moves of this magnitude and speed historically have followed weakness in the Dow, during the 1930s for example, or after the crash of 1987.

Wowed investors had barely swept up the last of the confetti from their Dow 10,000 bashes when party time descended again late Monday. Even though the Dow, composed of only 30 blue-chip stocks, is the narrowest of the market's well-known indicators, investment strategists noted that its latest move was indeed cause for celebration because it was built on a much broader base than had characterized the market in recent months.

While the assault on Dow 10,000 was led by a narrow band of favored stocks like Microsoft, Dell Computer, Cisco Systems and General Electric, the upward action in April and Monday included a much broader group of stocks, including companies in unglamorous industries like electric utilities, paper products, railroads and chemicals.

``The market had been dominated for a number of months by a fairly elite group of large-capitalization growth stocks,'' explained A. Marshall Acuff, equity strategist at Salomon Smith Barney. ``But while increasing numbers of those stocks were showing diminishing returns, the cyclical and smaller stocks were extraordinarily cheap. Their coming along has created a more egalitarian market.''

In what was an extraordinary shift in investor sentiment, the stocks that had been beloved started to look pricey while the former dogs looked swell. Behind the change was investors' growing perception that economic growth around the world was rebounding and that even the lowliest of manufacturing companies would participate in the recovery. Since many of these companies' stocks were trading big discounts to the favorites, they looked like values.

The awakening among stocks that had been comatose for months, if not longer, means investors who had been sidelined from the market's action since October when stocks shook off global economic woes are participating once again. According to Salomon Smith Barney, in early April, 80.8 percent of U.S. stocks lagged the performance of the Standard & Poor's 500 index by 15 percent or more; at the end of the month, that number had dwindled to 77.1 percent.

But not all are winners in following this change in market leadership. The former darlings and the indexes they dominate are being punished by the shift. Dell is down 22.5 percent from its February high, Microsoft has lost almost 16 percent from its April peak and General Electric is down 9.7 percent.

Because stocks in the S&P 500 index are weighted not equally but by their market values, the recent declines among these companies is limiting the index's return as well as those of millions of investors in mutual funds that mirror the S&P's moves. The S&P 500 rose 1.46 percent Monday, but is up only 10.2 percent for the year to the Dow's 19.97 percent jump.

``We've really had three markets,'' said Thomas O'Neill, chief investment officer at Fleet Financial Group in Boston. ``We've had an Internet mania unlike any mania I've ever seen. Then you have the mega-capitalization momentum stocks whose valuations are very extreme relative to their earnings growth rates. Then the rest of the market, the vast majority of stocks, have been down on average 15 percent from their highs.''

Not anymore. Stocks that led the Dow Jones above 11,000 Monday included Minnesota Mining & Manufacturing, which has risen 33 percent in a month; Goodyear Tire, which is up 21.5 percent, and Allied Signal, with a 24 percent gain. Even staid electric utility stocks rose, pushing the Dow Jones utility index up 1.5 percent.

What is remarkable about this broadening of the market is that it is happening during an upswing in stock prices. Extreme shifts in investor sentiment, like this one, usually occur during declining markets.

But on Monday twice as many stocks advanced as fell on the New York Stock Exchange, indicating strength throughout the market. That the shift away from the Nifty Fifty and into value stocks has been accomplished as the broader indexes are rising is just another case of history being made by this prolonged bull market.

Acuff argued that value stocks were so depressed, prior to the April move, that their rebound looked like a turnaround typically seen after stocks have fallen. ``The trigger was people felt the U.S. economy continued to be strong, the rest of the world was improving and it was almost the equivalent of coming out of a recession or the bottom of a bear market,'' he said.

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PHOTO New York Stock Exchange brokers and clerks react Monday as the Dow Jones industrial average passes 11,000 for the first time.

Kathy Willens/Associated Press