Wall Street extended its rally with modest gains in the major indexes today following two days of sharp advances, despite economic readings which painted a mixed picture of the economy.

The Dow Jones industrial average swept past 14,000 for the first time today after a relatively tame inflation report gave investors reason to extend an extraordinary Wall Street rally.

Higher oil prices and news of slowing growth in the service sector pulled stocks lower today despite some optimism over a 25 billion dollar bid for Guidant Corp.

Kmart Holding Corp, the retailer controlled by billionaire Edward Lampert, agreed to buy Sears, Roebuck & Co for $11 billion to create the third-biggest US retailer. Shares of both companies soared.