The Dow Jones industrial average reached another record close Tuesday, as investors largely looked past economic and earnings reports that had stirred concerns about the health of the economy.
The closely-followed blue-chip index managed to close higher despite a government report that inflation at the wholesale level saw its biggest jump in more than 30 years in November as gas prices inched higher.
Investors had also been uneasy after the stock market in Thailand plunged Tuesday following announcement of controls on foreign investment by the Thai government. The government backed off some of the controls after Thailand’s benchmark SET Index fell 14.8 percent and touched off concerns about a repeat of the economic crisis that rattled Asia in 1997.
“People are fundamentally optimistic and that’s containing the downside risk for the present,” said Stuart Schweitzer, global markets strategist at JPMorgan Asset & Wealth Management.
The Dow Jones industrial average finished the day up 30.05 points, or 0.24 percent, reaching a new closing high that eclipsed the last record close of 12,445.52, which came Friday. The broader Standard & Poor’s 500-stock index added 3.07 points, or 0.22 percent, but the Nasdaq composite index gave up 6.02 points, or 0.25 percent.
The Labor Department reported that the Producer Price Index, a measure of inflation at the wholesale level, jumped 2 percent in November. While an increase had been expected following two months of declines, the 0.5 percent rise far outstripped what analysts had been expecting. The core PPI figure, which excludes often volatile energy and food prices, rose 1.3 percent.
In other economic news, the Commerce Department said construction of homes and apartments increased by 6.7 percent in November but also that applications for permits to build homes declined for the 10th straight month.
Bryan Piskorowski, market analyst at Wachovia Securities, said last week’s softer reading of inflation at the consumer level raises questions about how corporate profits will hold up.
“It could have some negative implications for corporate profits in the sense that somebody has to get squeezed here,” he said. He noted Wall Street had already generally expected profits would be lower next year.
In corporate news, Morgan Stanley Inc. posted a stronger-than-expected fiscal fourth quarter profit and announced plans to spin off its Discover credit card business. The stock rose $1.33 to $82.70.
Circuit City Stores Inc. swung to a loss in the fiscal third quarter after sharp discounts on flat-panel televisions and computer equipment ate away at profit margins. The company, which lowered its full-year sales forecast, fell $3.75, or 16.5 percent, to $19.01.
Applied Signal Technology Inc. fell $2.29, or 14.6 percent, to $13.45 after the digital security company’s fiscal fourth-quarter earnings fell short of Wall Street’s expectation.
Oracle Corp. slid 81 cents, or 4.5 percent, at $17.10 after its fiscal second-quarter profit met expectations but investors questioned the software maker’s plan to grow through acquisitions.
Syntroleum Corp. jumped $1.29, or 45.9 percent, to $4.10 after the synthetic fuel processor signed an agreement with Kuwait Foreign Petroleum Exploration Co. to join in development of a 50,000 barrel per day gas-to-liquids facility in Papua New Guinea.
GenVec Inc., a gene-based drug developer, jumped 70 cents or 37.6 percent to $2.56 per share after a mid-stage clinical trial showed a pancreatic cancer treatment candidate, TNFerade, helped improve the survival rate of patients.
Overseas, Japan’s Nikkei stock average fell 1.09 percent. Britain’s FTSE 100 closed down 0.70 percent, Germany’s DAX index fell 0.66 percent and France’s CAC-40 lost 0.82 percent.
