Dow 11,000 Comes Up Three Points Short

The Dow Jones Industrial Average ($INDU) crossed 11,000 for the first time since September 2008 before settling just three points short of the technically irrelevant but important psychological level. An upbeat outlook from Chevron (CVX) helped boost fellow Dow component ExxonMobil (XOM) and energy shares in general, while a downgrade weighed on Alcoa (AA).

Unlike Dow 10,000, which has been crossed dozens of time in both directions, Dow 11,000 has only definitely been crossed to the upside once, in 2006, said Jeffrey Kleintop, chief market strategist at LPL Financial.

"The move to 11,000 is a clear sign of a well-advanced recovery in the market," Kleintop told clients Friday. "In a similar way, last Friday's employment report, reflecting substantial job growth for the first time in the recovery, was psychologically important to those that felt none of this recovery counts until we start creating jobs."

Kleintop added the rally will now become more meaningful for some investors, as the Dow hasn't stood above 11,000 since Lehman Brothers failed.

The blue-chip index put on 70 points, or 0.6%, to finish at 10,997, while the broader S&P 500 ($INX) gained 8 points, or 0.7%, to 1,194. The tech-heavy Nasdaq Composite ($COMPX) rose 17 points, or 0.7%, to close at 2,454.

Kleintop warned clients the market is due for another 5% to 10% pullback as the earnings season gets underway, followed by a rally back to more than Dow 11,000 by midyear. The major averages have now posted gains for six consecutive weeks.