Dow back to record territoryBlue-chip index posts 21st closing high since October; oil, gold prices climb.NEW YORK (CNNMoney.com) -- The Dow Jones industrial managed to score another record close Tuesday despite a jump in wholesale prices and turmoil in Thailand. The Dow (up 30.05 to 12,471.32, Charts) rose about 0.2 percent to post its 21st record close since October. The blue-chip barometer also scaled a new intraday high of 12,491.91 during the session.
The broader S&P 500 index (up 3.07 to 1,425.55, Charts) added a few points, while the tech-fueled Nasdaq composite (down 6.02 to 2,429.55, Charts) fell slightly. Stocks slid at the open after an inflation report and steep sell-off in Thailand raised jitters. But by midday, those worries eased as the positive tone that has underpinned the stock market's recent rally returned. A surge in crude prices, which jumped nearly $1, boosted oil shares and helped the overall advance. Recent economic data suggests the economy is still holding strong. Plus, stocks tend to do well at the end of the year, Steve Goldman, market strategist at Weeden & Co. "There's not much coming out over the next day or two that may sway that opinion," he added. The only release on tapWednesday is the government's weekly fuel inventory report. A final reading on third-quarter gross domestic product is due Thursday, as is a regional manufacturing survey. Inflation, Thai turmoil Stocks slid after 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 Treasury prices barely budged - a sign that investors weren't betting the PPI reading was a worrisome sign of rising inflation. The PPI report came on the heels of a report last week that showed prices paid by consumers remained in check last month. Stocks in Asia came under pressure after Thailand's central bank placed limits on foreign investment in an effort to curb the rise of its currency, the baht. Thailand's main stock market gauge, the SET, plummeted 15 percent. Major markets in Japan and Hong Kong also fell as investors were reminded of the financial crisis that struck Asia nearly a decade ago. After watching stocks get hammered, 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. What moved? Exxon Mobil (up $1.48 to $76.99, Charts), up 2 percent, was among the biggest gainers on the Dow, which had 18 of its 30 components rise. Elsewhere, Circuit City (down $3.75 to $19.01, Charts) sank 16 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 $0.79 to $48.55, Charts), which slipped almost 2 percent. The London Stock Exchange urged shareholders to rebuff the Nasdaq Stock Market's $5.2 billion takeover bid. Nasdaq (down $1.99 to $34.05, Charts) shares skidded 5 percent. Among tech stocks, shares of software maker Oracle (down $0.81 to $17.10, Charts) tumbled more than 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 nearly 2 percent after the company posted strong earnings and said it would spin off its Discovery credit card unit. Homebuilder Hovnanian Enterprises (down $0.69 to $34.56, 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. COMEX gold futures soared $7.50 to $625.40 an ounce, sending the Amex Gold Bugs index (up $10.74 to $343.08, Charts) up 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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