Dow hits new all-time high

NEW YORK (CNNMoney.com) -- Stocks rose Thursday, sending the Dow Jones industrial average to a record close, thanks to lower oil prices and some relief about the economic outlook.

A mild read on a key inflation indicator helped too, although it was countered by a report showing contraction in the manufacturing sector.

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The Dow Jones Industrial average (up 53.59 to 12,675.28, Charts) added 0.4 percent and closed at a record high, taking out its previous record from a week ago. The blue-chip barometer also hit a record trading high during the session.

The broader S&P 500 (up 7.61 to 1,445.85, Charts) index added 0.5 percent and ended at its highest point since November 2000.

The tech-heavy Nasdaq composite (up 4.45 to 2,468.38, Charts) added about 0.2 percent, recharging its morning advance, despite Dell turning negative.

After the close, Amazon.com (up $1.03 to $38.70, Charts) reported higher fourth-quarter sales and earnings, sending shares higher in extended-hours trading.

Here's a look at what was moving near the close.

U.S. light crude oil for March delivery fell 84 cents to settle at $57.30 a barrel on the New York Mercantile Exchange after having traded on both sides of unchanged throughout the session.

That helped revive the morning gains after a lull in the early afternoon.

Also adding support: the alleviation of some concerns about the health of the economy following the Federal Reserve's decision and statement Wednesday - and encouragement from most of the economic news released Thursday.

Economically sensitive shares led the late-session advance, with 25 out of 30 Dow stocks rising, including DuPont (up $1.06 to $50.62, Charts), Alcoa (up $0.50 to $32.80, Charts) and Boeing (up $1.50 to $91.06, Charts).

Dell (down $0.42 to $23.80, Charts) helped pace an early tech advance. The PC maker said late Wednesday that chairman and founder Michael Dell would retake the helm of the company, replacing its CEO, who abruptly resigned and is leaving the board.

The company also warned that fiscal fourth-quarter sales and earnings would miss estimates.

However, investors initially focused on the management changes, and Dell shares surged Thursday morning, lifting the broader technology sector.

However, by the late afternoon, Dell stock had turned negative, and other stocks that had been lifted by the PC maker gave back bigger gains.

Meanwhile, Google (down $19.75 to $481.75, Charts) shares continued to slide as investors took a "sell the news" approach in response to its earnings released late Wednesday. The Internet search leader reported higher quarterly and full-year financial results that topped analysts' estimates. (Full story)

Other big tech decliners included Hewlett-Packard (down $0.91 to $42.37, Charts) and Microsoft (down $0.30 to $30.56, Charts).

Stocks rallied Wednesday after the Federal Reserve opted to hold a key short-term interest rate steady at 5.25 percent, as expected, and implied in its statement that the economy is holding firm, while core inflation is moderating.

That outlook seemed to be echoed by economic news released early Thursday morning, including reports that personal income and spending rose in December, in line with estimates. At the same time, the report's inflation component, the core PCE deflator, rose just 0.1 percent. (Full story)

A separate report showed a bigger than expected decline in the number of Americans filing new claims for unemployment.

The early morning reports seem to be in line with the Fed's bet that the economy is slowing enough to take the edge off inflation but not enough to send the economy into a recession, said Richard Hoyt, portfolio manager at KDV Wealth Management.

But on the downside, the January ISM index, released later in the morning, showed a bigger than expected decline, falling to 49.3. A level below 50 is seen as meaning contraction in the sector.

The report was in tune with a weaker Chicago PMI - a regional manufacturing report released earlier in the week. The two reports raised concerns that the overall sector may be seeing a slowdown.

"There may be some concern with that sector, but the big picture on the economy and on the demand side of the supply and demand equation still looks good," Hoyt said, noting the strong fourth-quarter GDP report released Thursday and upbeat readings on consumer spending and durable goods orders released earlier in the week.

Friday brings the biggest economic news of the week: the January jobs report. Employers are expected to have added 150,000 to their payrolls in the month after adding 167,000 last month. The unemployment rate, generated by a separate survey, is expected to hold steady at 4.5 percent.

Average hourly earnings, the report's inflation component, is expected to have risen 0.3 percent after rising 0.5 percent in the previous month.

Market breadth was positive. On the New York Stock Exchange, winners topped losers 2 to 1 on volume of nearly 1 billion shares. On the Nasdaq, advancers edged decliners by 4 to 3 on volume of 1.35 billion shares.

in addition to Dell and Google, other tech movers included On Semiconductor (up $1.36 to $9.72, Charts) rallied 15 percent after reporting higher fourth-quarter earnings that topped estimates.

Automakers were reporting their January sales throughout the day. Ford Motor (up $0.15 to $8.28, Charts) reported U.S. vehicle sales fell 19 percent from a year earlier.

Comcast (down $1.43 to $42.92, Charts) reported higher fourth-quarter earnings that nonetheless missed analysts' expectations, sending shares of the cable television operator lower.

Earnings for the broad S&P 500 are currently on track to rise 10.3 percent from a year ago, according to the latest figures from Thomson Financial.

A number of oil services companies reported earnings Thursday morning. Earnings for the sector are expected to decline in the fourth quarter for the first time since 2002, according to Thomson Financial.

Exxon Mobil (up $0.97 to $75.07, Charts) reported the highest annual profit in U.S. history Thursday morning, although fourth-quarter net income slipped from a year earlier. Exxon shares rose 1 percent. (Full story)

Marathon Oil (up $0.42 to $90.76, Charts) reported lower fourth-quarter earnings Thursday, due to weaker refining margins and lower natural gas prices. Nonetheless, Marathon shares rose.

A variety of energy stocks gained Thursday, lifting the Amex Oil (up 15.62 to 1,179.89, Charts) index by 1.7 percent.

Treasury prices fell, raising the yield on the benchmark 10-year note to 4.83 percent from 4.80 percent late Wednesday. Treasury prices and yields move in opposite directions.

In currency trading, the dollar slipped versus the euro and was little changed against the yen.

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