Another run at a Dow record

NEW YORK (CNNMoney.com) -- The Dow industrials flirted with a new high near midday Thursday due to a mild inflation reading and a pair of big corporate deals, but tech stocks struggled after discouraging news from Dell and Applied Materials.

The Dow Jones industrial average (up 38.02 to 12,289.73, Charts) rose 0.3 percent around 2-1/2 hours into the session, briefly touching a new record trading high, before scaling back a bit. The blue-chip barometer ended the previous session at a record high for the 16th time since Oct. 3.

The broader S&P 500 (up 3.46 to 1,400.03, Charts) index added 0.3 percent after ending the previous session at its highest level since Nov. 9, 2000.

The tech-fueled Nasdaq composite (down 1.42 to 2,441.33, Charts) was little changed after ending the previous session at its highest level since Feb. 15, 2001.

"The CPI report was good news for investors, in that it shows inflation pressures continue to abate," said Alan Gayle, senior investment strategist at Trusco Capital Management.

"But the market has had a strong run and has already prices in a lot of good news," he said. "So this CPI report doesn't have the positive impact it used to."

Since bottoming in July, the major gauges have been on an upswing, as investors have reacted well to a bevy of supportive factors. They include: lower oil prices, improved quarterly earnings, a Federal Reserve that has halted its interest rate campaign, and bets that inflation is moderating and the economy has avoided a so-called "hard landing."

Wednesday's economic news - a regional read on manufacturing and the minutes from the last Federal Reserve policy meeting - reinforced the current economic outlook. Thursday's economic news did too, including the CPI, however the stock reaction was more muted.

"It doesn't mean the rally is in trouble, but near-term, we might be due for a breather," Gayle said.

The October consumer price index (CPI) fell 0.5 percent, as it did in September. Economists surveyed by Briefing.com thought it would fall 0.3 percent.

But investors focused more on the report's inflation component, which showed modest pricing pressure. The so-called "core" CPI, which excludes volatile food and energy prices, rose 0.1 percent, versus forecasts for a rise of 0.2 percent. Core CPI rose 0.2 percent last month.

A separate report showed that weekly jobless claims dipped, as expected.

An additional report showed that industrial production rose 0.2 percent in October, just short of forecasts, while capacity utilization rose to 82.2 percent, above expectations.

In corporate news, Dell (down $0.91 to $24.84, Charts) said late Wednesday that it will delay filing its quarterly report until later in the month, instead of Thursday evening, as had been expected. (Full story).

Applied Materials (down $0.85 to $17.80, Charts) reported higher quarterly earnings and revenue late Wednesday that was nonetheless shy of forecasts. Shares slipped Thursday.

Boeing (up $1.92 to $89.00, Charts) continued to advance one session after reports said the aircraft maker was poised to receive $10 billion in deals over the next few weeks.

In other news, Clear Channel (up $1.38 to $35.50, Charts) has agreed to an almost $19 billion deal to go private, while Reader's Digest (up $1.11 to $16.62, Charts) has agreed to a $2.4 billion buyout.

Cisco Systems (up $0.34 to $26.94, Charts) said late Wednesday that its board has approved buying back an additional $7 billion in common stock, building on its existent buyback program. Cisco shares inched higher.

Market breadth was mixed. On the New York Stock Exchange, winners beat losers nine to seven on volume of 680 million shares. On the Nasdaq, decliners topped advancers four to three as 880 million shares changed hands.

Treasury bond prices fell, raising the yield on the benchmark 10-year note to 4.64 percent, from 4.62 percent late Wednesday. Bond prices and yields move in opposite directions.

In currency trading, the dollar gained versus the euro and the yen.

U.S. light crude oil for December delivery fell $1.01 to $57.75 a barrel on the New York Mercantile Exchange.

COMEX gold rose $1.20 to $625 an ounce.

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