Wall Street extended its record-setting rally yesterday as a sharp drop in oil prices and a surprise jump in the nation's gross domestic product encouraged more buying. The Dow Jones industrials...

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NEW YORK — Wall Street extended its record-setting rally yesterday as a sharp drop in oil prices and a surprise jump in the nation’s gross domestic product encouraged more buying. The Dow Jones industrials and the Standard & Poor’s 500 index both reached new 3-1/2-year highs.

The Dow rose 56.46 to 10,815.89, surpassing the 3-1/2-year high reached Tuesday. The Dow last closed above 10,800 on June 13, 2001.

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Microsoft, one of the 30 Dow stocks, slipped 10 cents to $26.97 after Europe’s second-highest court upheld interim sanctions against the software giant in the European Commission’s antitrust case. Boeing, also a Dow stock, gained 49 cents to $53.91.

Broader stock indicators were moderately higher. The S&P 500 was up 4.12 at 1,209.57, bettering the 3-1/2-year high set Dec. 15. The Nasdaq composite index gained 6.12 to 2,157.03, less than 6 points off its multiyear high set last week.

The market’s buying momentum surged when crude-oil futures plummeted in response to the Energy Department’s report of an increase of 2.1 million barrels in the nation’s petroleum reserve last week. Demand for gasoline also fell. Shortly after the report, a barrel of light crude was quoted at $44.24, down $1.52, on the New York Mercantile Exchange.

Wall Street also welcomed the Commerce Department’s final third-quarter GDP reading, which rose to 4 percent from previous estimates of 3.9 percent.

“Right now, the market is moving on any headline that moves over the wires, and right now the news is pretty good,” said Jack Caffrey, equities strategist at J.P. Morgan Private Bank. “That’s what happens in a slow week, like we’re having. We’ll probably drift higher this way until earnings season next month.”

The GDP report gave many investors hope that the fourth-quarter reading will be stronger than expected. Analysts had feared that low job growth and high energy prices would stifle economic growth. Oil prices, in particular, were seen as an extra drain on consumers’ incomes, but the Commerce Department figure, along with the Energy Department’s inventory report, assuaged some of those concerns.

“Any time you’re up the day after you set new highs, that’s a great sign,” said Neil Massa, equity trader at John Hancock Funds. “Long term, of course, whether we can sustain it remains to be seen. But I do think that, without any major surprises, we’ll be up the rest of the year.”