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.

The Dow Jones Industrial average (up 51.99 to 12,673.68, 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.

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The broader S&P 500 (up 7.70 to 1,445.94, Charts) index added 0.5 percent and ended at its highest point since September 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 (Charts) reported higher fourth-quarter sales and earnings, sending shares higher in extended-hours trading.

Video game publisher Electronic Arts (Charts) reported lower quarterly profit after the close that nonetheless topped estimates, sending shares higher in extended-hours trading.

Stocks rose Thursday morning as investors focused on Dell's management shakeup and scooped up select tech shares.

But the market stumbled a bit in the middle of the day, until a plunge in oil prices gave investors a second wind near the close, with a blue-chip advance leading the recovery.

Also helping: the alleviation of some concerns about the health of the economy following the Federal Reserve's decision and statement Wednesday - and some of the economic news Thursday.

Thursday's reports included a mild read on a relevant inflation indicator and a big drop in jobless claims ahead of Friday's monthly jobs report. On the downside, another report showed contraction in the manufacturing sector.

Economically sensitive shares led the late-session advance, with 23 out of 30 Dow stocks rising, including DuPont (up $1.02 to $50.58, Charts) and Alcoa (up $0.50 to $32.80, Charts).

"That's where the strength has been recently and today it was driven by Boeing, Caterpillar and other blue chips," said Chris Johnson, chief investment officer at Johnson Research Group.

Johnson said that while the strength in blue chips is positive, he is a bit concerned that the Nasdaq and the tech sector haven't been able to get the same kind of traction recently.

While the Dow and S&P 500 both broke through multi-year highs Thursday, the Nasdaq remains below the more than six-year high it hit in mid-January.

"It's not going to sleep, but it's not really getting anywhere," Johnson added.

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.

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 $0.92 to $42.36, 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.

Market breadth was positive. On the New York Stock Exchange, winners topped losers by more than 3 to 2 on volume of 1.68 billion shares. On the Nasdaq, advancers topped decliners by a similar margin on volume of 2.22 billion shares.

In addition to Dell and Google, other tech movers included On Semiconductor (up $1.36 to $9.72, Charts), which rallied over 16 percent after reporting higher fourth-quarter earnings that topped estimates.

Automakers were reporting their January sales throughout the day. Ford Motor (up $0.16 to $8.29, Charts) reported U.S. vehicle sales fell 19 percent from a year earlier, while GM (up $0.19 to $33.03, Charts) said sales fell 20 percent from a year ago.

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 10.4 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 $0.98 to $75.08, Charts) reported the highest annual profit in U.S. history Thursday morning, although fourth-quarter net income slipped from a year earlier. (Full story)

Marathon Oil (up $0.57 to $90.91, Charts) reported lower fourth-quarter earnings Thursday, due to weaker refining margins and lower natural gas prices.

A variety of energy stocks gained Thursday, lifting the Amex Oil (up 15.62 to 1,179.89, Charts) index by 1.3 percent.

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. The price of oil has surged over the last week, after slumping through the first part of the year.

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 gained modestly versus the euro and the yen.

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