The stock rally gave bonds and the dollar a slight boost. The world's most closely-watched stock measure crossed the milestone just minutes before the close of trading to end at 11,014.69, up 225.65 points, or 2.09 per cent.

It was barely a month ago that Wall Street celebrated the Dow's first surge through the 10,000 mark on March 16. The blue-chip index closed above 10,000 on March 29, and scored a record closing high of 10,878.38 only last Thursday.

"The speed of the market is nothing short of startling," said Scott Bleier, chief market strategist for Prime Charter Ltd. "It shows the power of the good economic fundamentals and the demographics - the desire of the American public to invest and keep investing."

In the broader market, advancing issues led declines by 1,992 to 996 on active volume of 811.5 million onthe New York Stock Exchange. The Dow's recent burst of energy has been fuelled by a push among investors to buy stocks that are poised to benefit from the thriving economy. Oil stocks, aluminum makers and paper companies have picked up sharply in the past month. The spark that sent the Dow past a new milestone on Monday was a report showing the strong economy is not so hot that it is causing inflation.

The National Association of Purchasing Management reported that its US Manufacturing index, a key measure of business activity, rose to 52.8 in April, a lower figure than the 54.3 recorded in March. The news soothed recent fears about inflation, since it showed a slowing in the manufacturing sector. In the face of tough competition, US companies have been unable to raise their prices, reining in price-based inflation, while productivity gains have allowed corporations not to hire more staff at higher salaries, limiting cost-based inflation.

"These numbers show that we can have nice moderate growth in theeconomy without inflation," said Mara Glassel, vice president of Prudential Securities Equity Focus Group. The Dow's 1,000-point sprint shattered its previous speed record over the distance, besting a four-month run from 6,000 to 7,000 completed on February 13, 1997. That gain was a 16 per cent advance, however, compared with 10 per cent in the latest move.

Technology stocks fell, though, as investors cashed out of the high-flying sector and bought more economically sensitive shares. The Nasdaq Composite index, laden with technology companies, slipped 7.27 points, or 0.29 percent, to 2,535.58.

The last few sessions have highlighted the close relationship between stocks and bonds. The slightest rise in inflation brings bond prices down, raising their yield and consequently attracting investors away from stocks. When inflation fears subside, capital pours from bonds into stocks, sending the Dow ever higher. The benchmark 30-year US treasury bond edged up 2/32, or 62.5 cents on a $1,000 bond.