The major stock gauges remained sharply higher as the

Dow Jones Industrial Average

hovered above record territory going into the final hour of trading.

The Dow was up 192 to 9659. Its all-time closing high is 9643.32.

The

S&P 500

was up 18 to 1264. The

Nasdaq Composite Index

was up 28 to 2321. The small-cap

Russell 2000

was up 2 to 396.

TheStreet.com Internet Sector

index was up 6 to 530.

TheStreet.com E-Commerce Index

was up a fraction to 95.

Meanwhile,

Morgan Stanley Dean Witter

chief U.S. investment strategist Peter Canelo is increasing the stock portion of his firm's U.S. balanced portfolio to 70% from 65%.

TheStreet.com

wrote about the move

this afternoon.

Bonds rallied after the release of the February

employment report

and stocks shot higher at the open. The

Labor Department

reported nonfarm payrolls rose 275,000 in February, while the unemployment rate rose to 4.4% from 4.3%.

The 30-year Treasury bond, well off its session highs, was up 1 3/32 to 94 21/32, yielding 5.62%.

As for stocks, aside from the Dow, the other major proxies haven't been able to reach new highs.

Meanwhile, the March S&P 500 futures contract traded within about 17 points of its all-time high today but couldn't make it to record territory. The contract reached its all-time high of 1294.20 on Jan. 11, noted William Keuffel, market strategist at

Optima Investment Research

in Chicago.

Keuffel pegged resistance on the March contract at 1287.50, which the contract hit on Feb. 24. The March contract was up 21.50 to 1271.20, off a high of 1277.50.

On the

New York Stock Exchange

, advancers were beating decliners 1,903 to 1,006 on 649 million shares. On the

Nasdaq Stock Market

, winners were beating losers 2,051 to 1,760 on 621 million shares.

On the NYSE, 67 issues had set new 52-week highs while 31 had touched new lows. On the Nasdaq, 64 issues had set new lows while new highs totaled 47.

On the Big Board,

CompUSA

(CPU)

was most active with 16.4 million shares changing hands. It was down 1 13/16, or 22.3%, to 6 5/16, after last night warning it sees a break-even third quarter and a fourth-quarter loss because of lower-than-expected sales. Today,

Salomon Smith Barney

,

Goldman Sachs

,

Credit Suisse First Boston

and

NationsBanc Montgomery Securities

downgraded the stock.

On the Nasdaq,

Intel

(INTC) - Get Report

was most active with 16.9 million shares changing hands. It was up 3/8 to 113 11/16.

2:08 p.m.: Dow, Closing in on 9700, Soars into Record Territory

With today's jobs report calming inflation fears, bonds and stocks rallied as the blue-chip

Dow Jones Industrial Average

has soared past its record closing high of 9643.32.

The 30-year Treasury bond was up 1 21/32 to 95 7/32, yielding 5.58%.

The Dow was up 214 to 9681. Its all-time closing high was set Jan. 8. The

S&P 500

was up 22 to 1269. The

Nasdaq Composite Index

was up 34 to 2327. The

Russell 2000

was up 3 to 397.

TheStreet.com Internet Sector

was up 7 to 531.

TheStreet.com E-Commerce Index

was up 1 to 96.

On the economic front, the

Labor Department

reported

nonfarm payrolls

rose 275,000 in February, while the unemployment rate rose to 4.4% from 4.3%. Consensus estimates were for nonfarm payrolls to rise 245,000 and for the unemployment rate to remain at 4.3%. Inflation fears retreated on news that

average hourly earnings

rose by just one-tenth of a percentage point, the smallest increase since February 1996.

On the

New York Stock Exchange

, advancers were beating decliners 1,973 to 883 on 541.8 million shares. On the Nasdaq, winners were beating losers 2,054 to 1,573 on 493.2 million shares.

On the NYSE, 64 issues had set new 52-week highs while 27 had touched new lows. On the Nasdaq, 53 issues had set new lows while new highs totaled 45.

On the Big Board,

CompUSA

(CPU)

was most active with 14.3 million shares changing hands. It was down 2 1/16, or 25.4%, to 6 1/16, after last night warning it sees a break-even third quarter and a fourth-quarter loss because of lower-than-expected sales. Today,

Salomon Smith Barney

,

Goldman Sachs

,

Credit Suisse First Boston

and

NationsBanc Montgomery Securities

downgraded the stock.

On the Nasdaq,

7thStreet.com

(SEVL)

-- no relation to the parent company of this publication -- was most active with 13.4 million shares changing hands. It was up 1 15/16, or 71.3%, to 4 11/16, after the

oft-wrong Inside Wall Street column in

Business Week

said the tiny Internet content provider is preparing to announce a pact with

America Online

(AOL)

. The company's Tutorials.com is expected to become an "anchor tenant" in AOL's Computing and Workplace Channels, according to the column. AOL was up 5/8 to 86 7/8.

Focus: Cable TV Get-Together

Adelphia Communications

(ADLAC)

said today it's buying

Century Communications

(CTYA)

for $5.2 billion, including $1.6 billion in debt.

Shares of Adelphia fell on the news, falling 2 7/8, or 5.1%, to 53 7/8, while Century shares surged 3 3/8, or 9.6%, to 38 9/16.

Century owns and operates cable TV systems with concentrations of subscribers in California, Colorado and Puerto Rico. Century recently entered an agreement with

TCI

(TCOMA)

to create a 70%-owned joint venture which will operate a cable system group serving about 800,000 subscribers in the Los Angeles area.

On Feb. 23, Adelphia announced an agreement to acquire closely held

FrontierVision Partners

for $2.1 billion in cash, stock and debt.

12:59 p.m.: Midday Musings: Talk of Dow 10,000 Resumes as Stocks Keep Surging

11:54 a.m.: Powerful Rise Continues for Stocks, Bonds

A lack of big surprises in today's

employment report

sent both bonds and stocks skyrocketing.

The 30-year Treasury bond was off its highs but still up 1 16/32 to 95 2/32, yielding 5.59%.

The

Dow Jones Industrial Average

was up 215 to 9682.

IBM

(IBM) - Get Report

was leading the Dow higher, up 5 to 176.

The

S&P 500

was up 24 to 1270. The

Nasdaq Composite Index

was up 38 to 2331. The small-cap

Russell 2000

up 3 to 397.

TheStreet.com Internet Sector

index was up 10 to 533 and

TheStreet.com E-Commerce Index

was up 1 to 96.

The E-Commerce Index was

revised after yesterday's close, with

Cyberian Outpost

(COOL)

,

Digital River

(DRIV) - Get Report

and

uBid

(UBID)

replacing

Barnes & Noble

(BKS) - Get Report

,

Hollywood Entertainment

(HLYW)

and

Micro Warehouse

(MWHS)

.

Financials were strong. The

Philadelphia Stock Exchange/KBW Bank Index

was up 1.8%, while the

American Stock Exchange Broker/Dealer Index

was up 1.5%.

As for the jobs data, the

Labor Department

reported

nonfarm payrolls

rose 275,000 in February, while the unemployment rate rose to 4.4% from 4.3%. Consensus estimates were for nonfarm payrolls to rise 245,000 and for the unemployment rate to remain at 4.3%.

On the

New York Stock Exchange

, advancers were beating decliners 1,979 to 773 on 390 million shares. On the

Nasdaq Stock Market

, winners were beating losers 1,976 to 1,200 on 311 million shares.

Earlier severe problems with Nasdaq's

SelectNet

and

SOES

trading systems have been resolved. The systems were down from 9:41 a.m. to 11:05 a.m., according to

CNBC

, and that has depressed trading volumes.

On the NYSE, 60 issues had set new 52-week highs while 20 had touched new lows. On the Nasdaq, 39 issues had set new highs while new lows totaled 32.

On the Big Board, most active was

CompUSA

(CPU)

, with 10.9 million shares changing hands. It was down 2, or 24.6%, to 6 1/8. CompUSA yesterday warned it sees a break-even third quarter and a fourth-quarter loss. The

First Call

12-analyst consensus estimate had called for third-quarter earnings of 21 cents a share, vs. the year-ago 27 cents, and fourth-quarter earnings of 11 cents, vs. the year-ago loss of 19 cents.

Tech Focus

The leading tech sector barometers were all higher. The

Nasdaq 100

was up 1.7%, while the

Morgan Stanley High-Tech 35

was up 2.3%. The

Philadelphia Stock Exchange Computer Box Maker Index

was up 3%. The

Philadelphia Stock Exchange Semiconductor Index

was up 4.4%.

Hambrecht & Quist

upgraded

Yahoo!

(YHOO)

to buy from hold. It was up 7 7/16 to 158 7/8.

Level One Communications

(LEVL) - Get Report

was up 18 11/16, or 69.1%, to 45 13/16 in the wake of

yesterday's news that

Intel

(INTC) - Get Report

agreed to acquire Level One for $2.2 billion in stock. Level One was most active on the Nasdaq with 10.2 million shares changing hands.

Intel was up 2 3/16 to 115 1/2.

10:55 a.m.: Dow on Pace for Record as Rally Rolls On

As it turned out, the jitters over the

employment report

in both the bond and stock markets were unfounded.

After the market-friendly numbers came out, the 30-year Treasury bond exploded up more than 2 full points, and when stocks opened, the major market averages soared.

The

Dow Jones Industrial Average

has jumped past its

Jan. 8 all-time closing high of 9643.32 and intraday high of 9647.96, lately up 197 to 9664.

Meanwhile, the 30-year bond was up 1 28/32 to 95 14/32, yielding 5.57%. The yield on the long bond stood at 5.70%

yesterday.

The

S&P 500

was up 23 to 1270.

The

Nasdaq Composite Index

was up 36 to 2329. The small-cap

Russell 2000

up 4 to 398.

TheStreet.com Internet Sector

index was up 9 to 534.

Yahoo!

(YHOO)

jumped 6 7/16 to 157 7/8 after

Hambrecht & Quist

upgraded it to buy from hold.

TheStreet.com E-Commerce Index

was up 1 to 96. The E-Commerce Index was

revised after yesterday's close, with

Cyberian Outpost

(COOL)

,

Digital River

(DRIV) - Get Report

and

uBid

(UBID)

replacing

Barnes & Noble

(BKS) - Get Report

,

Hollywood Entertainment

(HLYW)

and

Micro Warehouse

(MWHS)

.

Financials were soaring on the bond rally. The

Philadelphia Stock Exchange/KBW Bank Index

was up 2%, while the

American Stock Exchange Broker/Dealer Index

was up 1.6% and on pace for a new closing high. Retail stocks were flying. The

S&P Retail Index

was up 2.8%.

As for the jobs data, the

Labor Department

reported

nonfarm payrolls

rose 275,000 in February, while the unemployment rate rose to 4.4% from 4.3%. Consensus estimates were for nonfarm payrolls to rise 245,000 and for the unemployment rate to remain at 4.3%.

The strong jobs report provided continued evidence the economy continues to be strong, while there were no signs of inflation in the report. The report said average hourly earnings rose by just 0.1%, the smallest increase since February 1996.

Alan Skrainka, chief market strategist at

Edward Jones

in St. Louis, said economic growth has exceeded consensus forecasts for 10 consecutive quarters and that strong growth will ultimately lead to stronger corporate profits. As for inflation, it is "as dead as it gets," he said.

"We continue to be bullish," said Skrainka. "I just think investors should stay the course. The market will continue to be volatile, but right now the outlook is very positive" because of the strength in the economy.

"Blue-chips continue to lead the charge," he said, adding that large-cap growth stocks are continuing to outperform "the rest of the crowd."

Financials, retailers, health care and technology are the areas investors should emphasize in their portfolios, he said.

Industries tied to commodity prices, like energy, manufacturing and metals, "those are the areas we don't think are attractive for long-term investors," he said.

On the

New York Stock Exchange

, advancers were beating decliners 1,986 to 651 on 285 million shares. On the

Nasdaq Stock Market

, winners were beating losers 1,822 to 923 on 186 million shares. Severe problems with Nasdaq's

SelectNet

and

SOES

trading systems are keeping a lid on volume.

On the NYSE, 56 issues had set new 52-week highs while 12 had touched new lows. On the Nasdaq, 32 issues had set new highs while new lows totaled 23.

9:50 a.m.: Market Surges at the Open

Stocks rallied on the heels of a soaring Treasury market which surged after the

Labor Department

reported

nonfarm payrolls

rose 275,000 in February, while the unemployment rate rose to 4.4% from 4.3%.

Consensus estimates were for nonfarm payrolls to rise 245,000 and for the unemployment rate to remain at 4.3%.

The 30-year Treasury bond was up 2 2/32 to 95 20/32, yielding 5.55%.

The

Dow Jones Industrial Average

was up 149 to 9617. The

S&P 500

was up 21 to 1268. The

Nasdaq Composite Index

was up 42 to 2335. The

Russell 2000

was up 4 to 398.

TheStreet.com Internet Sector

index was up 14 to 537.

TheStreet.com E-Commerce Index

was up 3 to 97.

Most Up at Open -- NYSE

Telebras (TBH) , up 2 15/16 to 70

.

Most Up at Open -- Nasdaq

Level One Communications (LEVL) - Get Report, up 19 7/8 to 47

:

Intel

(INTC) - Get Report

has agreed to buy Level One for $2.2 billion in stock.

TheStreet.com

wrote about the deal

yesterday.

Most Down at Open -- NYSE

Newmont Mining (NEM) - Get Report, down 3/8 to 18 1/16

.

Most Down at Open -- Nasdaq

IDX Systems (IDXC) , down 10 3/8 to 15 5/8

: The company warned it expects to post a loss of 22 cents to 28 cents a share in the first quarter, short of the current

First Call

22-analyst consensus estimate of 35 cents. The company said first-quarter sales are expected to be in the range of $60 million to $65 million. The company blamed an unexpected deferral of purchasing decisions by its customers for the sales shortfall.