The Dow Jones industrial average closed above 10,000 for the first time yesterday as news that several big mergers are in the works gave investors a surge of optimism and propelled the entire stock market higher.

The session marked the fifth time that the 103-year-old index crossed 10,000, but it was the first time it had enough momentum to stay above five digits until the closing bell. The Dow closed at 10.006.78, a rise of 184.54.

The technology heavy Nasdaq index rose 72.78 points, or 3 per cent, to 2,491.95 points and the Standard and Poor's 500 gained 27.24 points, or 2.12 per cent, to 1,310.04.

On the bond market, the average yield on bellwether 30-year Treasury bonds was 5.641 per cent compared to 5.596 per cent on Friday.