Dow posts 21st record since October

NEW YORK (CNNMoney.com) -- An afternoon rally pushed the Dow Jones industrial to its highest level ever Tuesday - the 21st record the index has set since October.

The Dow (up 28.36 to 12,469.63, Charts) rose about 0.2 percent to exceed its previous record set on Friday. The blue-chip barometer also scaled a new intraday high of 12,491.91 during the session.

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The broader S&P 500 index (up 3.51 to 1,425.99, Charts) added a few points, while the tech-fueled Nasdaq composite (down 5.80 to 2,429.77, Charts) fell slightly.

An inflation report released before the market open rattled investors in the early going. The Labor Department's Producer Price Index, a measure of prices paid by businesses, rose sharply in November, posting its biggest gain since 1974.

But those concerns eased as investors bet the PPI reading wasn't a sign that inflation was rearing its head again.

The PPI report comes on the heels of a report last week that showed prices paid by consumers remained in check last month.

Recent economic data suggests the economy is still holding strong, said Steve Goldman, market strategist at Weeden & Co.

The year-end rally also helped lift the market. "This time of year - a few days before Christmas and before the new year - is a strong time for stock prices," he said.

Crude and gold prices climbed, while bond prices edged lower. The dollar fell against the euro and drifted versus the yen.

A staggering sell-off in Thai shares rocked markets early Tuesday. Thailand's main stock market gauge, the SET, plummeted 15 percent after the country's central bank placed limits on foreign investment in an effortto curb the rise of its currency, the baht.

Major markets in Japan and Hong Kong also fell as investors were reminded of the financial crisis that struck Asia nearly a decade ago.

But after witnessing the hammering stocks took, Thai authorities reversed course and said the restrictions wouldn't apply to equity investments - a move that should bring some short-term calm to the market, Paul Nolte, director of investments at Hinsdale Associates, said.

Also on the economic front, homebuilding activity rebounded in November at a pace that exceeded Wall Street's expectations but new permits sank to a nine-year low.

Builders started work on homes at an annual pace of 1.59 million in November, up from the 1.49 million rate in October. Building permits, a gauge of confidence in the market, fell to its lowest level since December 1997.

Here's a look at what was moving before the close:

Circuit City (down $3.75 to $19.01, Charts) sank 17 percent after it posted a quarterly loss and said its holiday sales were hurt by fierce price competition from Wal-Mart. Analysts had expected the electronics retailer to report a profit.

Concerns about holiday sales spread to fellow retailer Best Buy (down $0.72 to $48.62, Charts), which slipped 1 percent.

The London Stock Exchange urged shareholders to rebuff the Nasdaq Stock Market's $5.2 billion takeover bid. Nasdaq (down $1.99 to $34.00, Charts) shares skidded almost 6 percent.

Among tech stocks, shares of software maker Oracle (down $0.79 to $17.12, Charts) tumbled 4 percent. The company reported earnings in line with Wall Street's estimates late Monday, but some investors had expected even better results.

Morgan Stanley (Charts) gained 2 percent after the company posted strong earnings and said it would spin off its Discovery credit card unit.

Homebuilder Hovnanian Enterprises (down $0.64 to $34.61, Charts) fell 2 percent. The company reported a loss for its latest quarter late Monday and issued a full-year outlook that fell sharply below forecasts.

U.S. crude light crude oil for January delivery soared 94 cents to settle at $63.15 a barrel on the New York Mercantile Exchange.

Gold prices jumped as COMEX gold futures soared $7.50 to $625.40 an ounce. The Amex Gold Bugs index (Charts) climbed 3 percent.

Market breadth was mixed. On the New York Stock Exchange, advancers beat decliners by a margin of nearly 6 to 5 on volume of 1.56 billion shares. On the Nasdaq, losers topped winners by a margin of 4 to 3 as 1.99 billion shares changed hands.

Treasury prices edged lower, raising the yield on the benchmark 10-year note to 4.59 percent from 4.58 percent late Monday. Bond prices and yields move in opposite directions.

The dollar fell against the euro and drifted versus the yen.

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