Dow climbs again in 3-day winning streak (ext)

NEW YORK (CNNMoney) -- U.S. stocks climbed Wednesday, with the Dow posting a fresh two-year high for the third day in a row, as investors started to position themselves for the new year.

"The past year was pretty good and it seems to me that in the new part of the new year, you're kind of repositioning your portfolio in some way that suits your temperament," said Peter Tuz, president at Chase Investment Counsel of Charlottesville, Va.

At the closing bell, the Dow Jones industrial average (INDU) was up 32 points, or 0.3%, to a new 2-year high of 11,723. The Dow keeps breaking new 2-year highs, as it approaches 11,800.

Traders and economists alike are generally more optimistic about the economy in 2011. Earlier Wednesday, two separate reports signaled a brightening jobs picture and stoked optimism that the government's monthly labor report on Friday will also bring good news.

"My expectation is employment will start picking up a little steam just because the economy is picking up," said Erick Maronak, managing director at Victory Capital Management. "CEOs and management teams are expected to hire at a better clip his year than last, and that correlates with their investments overall."

Stocks started the year with a bang, but have had volatile trading days this week as investors pick and choose their spots.

Meanwhile, private sector payrolls soared by 297,000 in December, according to a separate report from payroll processor ADP. Economists surveyed by Briefing.com were expecting the report to show that payrolls increase by 100,000 last month, compared to November's 93,000 rise.

After the opening bell, a report from the Institute of Supply Management showed that activity in the service sector picked up last month. The index rose to 57.1 in December, topping forecasts, and up from 55 in November. Any reading above 50 signals expansion.

The dollar rose against the euro, the Japanese yen and the British pound.

Oil for February delivery gained 92 cents to settle at $90.30 a barrel.

Gold futures for February delivery fell $5.10 to settle at $1,373.70 an ounce.