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Stocks finished mixed with the Dow Jones Industrial Average at a new record close, as higher crude oil prices lifted energy stocks, offsetting earlier weakness sparked by a surprise rise in producer prices and disappointing results from Oracle Corp. The turmoil in Thailand did not affect the markets.

Today, the Dow closed up 30.05 or 0.24% to 12,471.32, to post its 21st record close since October. It also scaled a new intraday high of 12,491.91 during the session. The broader S&P 500 index closed up 3.07 or 0.22% to 1,425.55, and the tech-fueled Nasdaq composite closed down 6.02 or 0.25% to 2,429.55.

Market breadth was mixed. On the New York Stock Exchange, advancers beat decliners by a margin of nearly 17 to 15 on volume of 1.56 billion shares. On the Nasdaq, losers topped winners by a margin of 16 to 13 as 1.99 billion shares changed hands.

Stocks slid at the open after an inflation report and steep sell-off in Thailand raised jitters. The Thai central bank has unveiled plans to impose capital controls on foreign investors, in an effort to curb the rise of its currency. However, by midday, those worries eased and the positive tone that has underpinned the stock market’s recent rally returned. The Producer Price Index rose sharply to 2% in November, posting its biggest gain since 1974. This report came on the heels of a report last week that showed prices paid by consumers remained in check last month. The stronger than expected rise is a disappointment for folks expecting the Federal Reserve to cut rates in early 2007.

Shares of Circuit City Stores Inc. closed down $3.75 or 16% to $19.01, after it posted a quarterly loss and said its holiday sales were hurt by fierce price competition from Wal-Mart. The loss was wider than analysts’ estimates, due to price cuts, and scaled back sales projections.

Shares of Oracle closed down $0.81 or 14% to $17.10, despite reporting earnings in line with expectations. It reported a net income of $967 million, or and EPS of 18 cents against the 22 cents expected by analyst. Investors were disappointed that its sales of new software licenses rose less than expected.

Shares of Morgan Stanley closed up 2% after the company posted strong earnings and said it would spin off its Discovery credit card unit. The investment bank reported a 10% decline in net income for the fourth quarter, but profit still managed to outpace analysts’ expectations. Its net income slipped to $2.21 billion from $2.47 billion a year ago. The consolidated net revenue for the latest quarter was $8.63 billion versus $6.96 billion a year ago.

Stock of Pfizer Inc. closed up 1.4%, after the board raised its dividend and said elected CEO Jeffrey Kindler would serve as chairman. It raised its dividend from 24 cents to 29 cents per share, a 21% hike.

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.

All the best,
Manuel Jesus-Backus
The Portfolio Crafter
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