Wall Street climbs to new highs; transports rally

By Caroline Valetkevitch

NEW YORK (Reuters) - U.S. stocks edged higher in afternoon trading on Monday, lifting the Dow and S&P 500 to intraday highs after the indexes advanced for a third straight week, helped by railroad shares.

The Dow Jones transportation average was up 1 percent, also hitting another intraday record high, led by gains in railroad shares including Union Pacific, which was up 1.9 percent and among the top gainers on the S&P 500.

Results late Friday from Berkshire Hathaway showed profit from the BNSF railroad rose about 5 percent. Berkshire Class B shares were up 0.7 percent at $144.59, also among the top gainers in the S&P 500.

Oil prices extended recent losses, with U.S. crude oil prices falling below $78 a barrel, helping shares of some consumer companies.

Wal-Mart, due to report results on Thursday, climbed 1.5 percent.

"It's been a very sharp rally off a very sharp correction, no reason it shouldn't go higher but all it takes is one very determined seller to start a cascade of selling," said Tim Ghriskey, chief investment officer of Solaris Group in Bedford Hills, New York.

The Dow Jones industrial average rose 27.1 points, or 0.15 percent, to 17,601.03, the S&P 500 gained 4.53 points, or 0.22 percent, to 2,036.45 and the Nasdaq Composite added 10.68 points, or 0.23 percent, to 4,643.21.

The bulk of U.S. third-quarter earnings are in, though a handful of high-profile retailers have yet to report.

The Dow has gained 7.3 percent while the S&P 500 has risen 7.7 percent over the past three weeks, the best three-week performance for both indexes since October 2011.

Gilead Sciences rose 0.8 percent after data from a midstage study showed Merck's attempt to shorten hepatitis C treatment by adding Gilead's Sovaldi to its own oral two-drug combination came nowhere near the desired efficacy. Merck shares were down 0.6 percent at $59.

Shares of cable providers fell after U.S. President Barack Obama said the Federal Communications Commission should reclassify broadband to regulate it more like a public utility. Comcast lost 3.5 percent.

Advancing issues outnumbered declining ones on the NYSE by 1,630 to 1,379, for a 1.18-to-1 ratio on the upside; on the Nasdaq, 1,492 issues rose and 1,130 fell for a 1.32-to-1 ratio favoring advancers.

(Additional reporting by Chuck Mikolajczak; Editing by Bernadette Baum and Nick Zieminski)